District of New Jersey
Press releases recorded for this federal judicial district.
Bulgarian National Charged in Largest Identity Theft Ring of Its Time Extradited to Face Indictment in New JerseyRead the Press Release
NEWARK, N.J. – Aleksi Kolarov, 30, will appear in Newark federal court today after being extradited from Paraguay to face U.S. charges he participated in the Shadowcrew forum, an online marketplace for hacking and identity theft that was the largest of its kind when dismantled by the Department of Justice and the U.S. Secret Service in 2004, New Jersey U.S. Attorney Paul J. Fishman announced.
A Bulgarian national, Kolarov evaded capture until June 14, 2011, when Paraguayan law enforcement authorities arrested him at a hotel in Asunción, Paraguay. He was found in possession of hundreds of thousands of dollars in various currencies, counterfeit payment cards and electronic implements to re-encode cards. He has been incarcerated by Paraguayan authorities since that time relating to that conduct.
The U.S. indictment charges Kolarov with one count each of conspiracy, transferring false identification documents and offering access devices without authorization. He arrived in the United States on Friday, June 28, 2013, escorted by U.S. Marshals, and was held in federal custody over the weekend. He is scheduled to appear later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
“Aleksi Kolorov is charged with conspiring in the most notorious online cybercrime marketplace of its time, selling the means to steal money and identities to other criminals,” U.S. Attorney Fishman said. “This extradition shows that hiding behind computers and borders does not deter us. It is vital that law enforcement work internationally to bring cybercriminals to justice, no matter how long it takes.”
“The arrest and extradition of Aleksi Kolarov to the United States demonstrates the outstanding investigative abilities and steadfast commitment of the Secret Service to protect our nation’s financial infrastructure from unlawful acts committed by cyber-criminals on our homeland,” said Special Agent in Charge James Mottola of the U.S. Secret Service, Newark Field Office. “The successful apprehension of suspects is due to the superior efforts our special agents and participating members of the electronic crimes task forces which include federal, state and local law enforcement agencies, private industry and academia.”
According to the indictment:
Shadowcrew.com was an illegal online marketplace that trafficked in at least 1.5 million stolen credit and bank card numbers and caused more than $4 million in losses to the institutions issuing the cards.
Kolarov, along with the other 18 individuals charged in the indictment, participated in the international conspiracy to operate the Shadowcrew site. As part of the organization, Kolarov served as a vendor, using the site to sell illicit merchandise and services to other members. At one time, Shadowcrew.com had approximately 4,000 members dedicated to facilitating malicious computer hacking and the dissemination of stolen credit card, debit card and bank account numbers and counterfeit identification documents, such as drivers’ licenses, passports and Social Security cards. The conspiracy to commit this activity, often referred to as “carding,” facilitated the use of account numbers and counterfeit identity documents to steal identities and defraud banks and retailers.
Of the 19 international participants charged in the indictment, only three remain at large.
If convicted, Kolarov faces a maximum potential penalty of five years in prison on the conspiracy count, 15 years in prison on the identification documents count and 10 years in prison on the access device count. Each count also carries a maximum $250,000 fine, or twice the gross amount of pecuniary gain or loss resulting from the offense.
U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Special Agent in Charge Mottola, with the investigation leading to the charges. He also noted the valuable contributions of the Computer Crimes and Intellectual Property Section and Office of International Affairs in the Department of Justice’s Criminal Division and thanked the U.S. Marshals Service for facilitating the extradition. U.S. Attorney Fishman also praised the Paraguayan authorities for their vital role.
The government is represented by Assistant U.S. Attorney Erez Liebermann, Deputy Chief of the U.S. Attorney’s Office Criminal Division.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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Kolarov Indictment
Owner of Nellie’s Provisions Sentenced to Four Months in Prison for Tax EvasionRead the Press Release
CAMDEN, N.J. – The owner of a meat distribution company was sentenced today to four months in prison and four months of house arrest for evading taxes related to income diverted from his companies for his personal use, U.S. Attorney Paul J. Fishman announced.
Nicholas Papanier Sr., 57, of Sewell, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of tax evasion. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between 2006 and 2009, Papanier owned Nellie’s Provisions, a meat distribution company that provided all of the meat for Primo Hoagies franchises and other independent restaurants. In 2006, 2007 and 2008, Papanier persuaded Primo Hoagies franchise owners to buy Thumann’s deli products from Nellie’s Provisions, often paying for them in cash. He took a significant amount of the cash paid to Nellie’s Provisions and deposited it into his personal bank accounts. He then used the money from his personal accounts to pay personal expenditures. He diverted a total of $556,664 for the calendar years 2006, 2007 and 2008 in the amounts of $56,395, $349,264, and $151,005, respectively.
Papanier admitted that he did not report the diverted cash to the IRS and only reported Form W-2 wages, interest and dividend income, and property tax information. By omitting all of the diverted cash, he failed to disclose and report a significant portion of this income on his tax returns, causing those tax returns to substantially understate the amount of income he received.
He admitted that for 2006, 2007 and 2008, had he reported the additional cash on his income tax returns he would have owed the government $189,656.
As part of the plea and in addition to the restitution, Papanier agreed to forfeit $484,010 to the United States. On Oct. 14, 2009, the United States filed a Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States $372,042.54 in United States currency that was seized from Papanier’s bank accounts. On Sept. 16, 2010, the United States filed another Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States an additional $111,967.50 in United States currency that was seized from Papanier’s bank accounts. The Complaints alleged that the subject funds were subject to forfeiture to the United States because they were involved in and were traceable to Structuring of Currency to Avoid a Reporting Requirement.
In addition to the prison term, Judge Hillman sentenced Papanier to two years of supervised release – which includes four months of house arrest – and fined him $10,000.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden in the criminal case, and Jordan Anger of the U.S. Attorney’s Office Asset Forfeiture Unit in Newark in the civil action.
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Defense counsel: Ronald Warren Esq., Haddonfield, N.J.
Owner of Nellie’s Provisions Sentenced to Four Months in Prison for Tax EvasionRead the Press Release
CAMDEN, N.J. – The owner of a meat distribution company was sentenced today to four months in prison and four months of house arrest for evading taxes related to income diverted from his companies for his personal use, U.S. Attorney Paul J. Fishman announced.
Nicholas Papanier Sr., 57, of Sewell, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of tax evasion. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between 2006 and 2009, Papanier owned Nellie’s Provisions, a meat distribution company that provided all of the meat for Primo Hoagies franchises and other independent restaurants. In 2006, 2007 and 2008, Papanier persuaded Primo Hoagies franchise owners to buy Thumann’s deli products from Nellie’s Provisions, often paying for them in cash. He took a significant amount of the cash paid to Nellie’s Provisions and deposited it into his personal bank accounts. He then used the money from his personal accounts to pay personal expenditures. He diverted a total of $556,664 for the calendar years 2006, 2007 and 2008 in the amounts of $56,395, $349,264, and $151,005, respectively.
Papanier admitted that he did not report the diverted cash to the IRS and only reported Form W-2 wages, interest and dividend income, and property tax information. By omitting all of the diverted cash, he failed to disclose and report a significant portion of this income on his tax returns, causing those tax returns to substantially understate the amount of income he received.
He admitted that for 2006, 2007 and 2008, had he reported the additional cash on his income tax returns he would have owed the government $189,656.
As part of the plea and in addition to the restitution, Papanier agreed to forfeit $484,010 to the United States. On Oct. 14, 2009, the United States filed a Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States $372,042.54 in United States currency that was seized from Papanier’s bank accounts. On Sept. 16, 2010, the United States filed another Verified Complaint for Forfeiture In Rem to forfeit and condemn to the use and benefit of the United States an additional $111,967.50 in United States currency that was seized from Papanier’s bank accounts. The Complaints alleged that the subject funds were subject to forfeiture to the United States because they were involved in and were traceable to Structuring of Currency to Avoid a Reporting Requirement.
In addition to the prison term, Judge Hillman sentenced Papanier to two years of supervised release – which includes four months of house arrest – and fined him $10,000.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden in the criminal case, and Jordan Anger of the U.S. Attorney’s Office Asset Forfeiture Unit in Newark in the civil action.
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Defense counsel: Ronald Warren Esq., Haddonfield, N.J.
Jersey City Contractor Pleads Guilty to Bribing A VA OfficialRead the Press Release
NEWARK, N.J. – A Jersey City, N.J. contractor admitted today that he bribed a Department of Veterans Affairs (VA) official so that two companies with which he was affiliated could obtain favorable treatment from the VA , U.S. Attorney Paul Fishman announced.
Hitesh Desai, 42, of Jersey City, pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of bribing a federal public official by promising to make $5,000 in corrupt payments in exchange for official action.According to documents filed in this case and statements made in court:
Desai was a contractor who worked on various construction projects for the VA. In 2012, Desai became affiliated with two businesses that were applying to be placed on a VA list known as the Multiple Award Task Order Contract (MATOC). Certain lucrative VA construction projects were available only to contractors who were placed on the MATOC list. Between October 2012 and February 2013, Desai offered and promised to make a $5,000 bribe payment to an official who worked at the VA, who Desai understood to be responsible for serving on a committee that would determine which contractors were placed on the MATOC list, in exchange for the official’s official assistance in placing the two businesses with which Desai was affiliated on the list. On Oct. 18, 2012, and Dec. 6, 2012, Desai made two cash payments, totaling $1,000, to the aforementioned official in exchange for the official’s official assistance in placing the two businesses with which he was affiliated on the VA’s MATOC list.
The count to which Desai pleaded guilty carries a maximum potential penalty of 15 years in prison, a $250,000 fine, twice the aggregate loss to victims or gain to the defendant, or three times the amount of the bribe payments. Sentencing is scheduled for Oct. 2, 2013.
U.S. Attorney Fishman credited special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford for the investigation in this case.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division in Newark.13-270
Defense counsel: Theodore Margolis, Bridgewater, N.J.
Desai Information
Jersey City Contractor Pleads Guilty to Bribing A VA OfficialRead the Press Release
NEWARK, N.J. – A Jersey City, N.J. contractor admitted today that he bribed a Department of Veterans Affairs (VA) official so that two companies with which he was affiliated could obtain favorable treatment from the VA , U.S. Attorney Paul Fishman announced.
Hitesh Desai, 42, of Jersey City, pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of bribing a federal public official by promising to make $5,000 in corrupt payments in exchange for official action.According to documents filed in this case and statements made in court:
Desai was a contractor who worked on various construction projects for the VA. In 2012, Desai became affiliated with two businesses that were applying to be placed on a VA list known as the Multiple Award Task Order Contract (MATOC). Certain lucrative VA construction projects were available only to contractors who were placed on the MATOC list. Between October 2012 and February 2013, Desai offered and promised to make a $5,000 bribe payment to an official who worked at the VA, who Desai understood to be responsible for serving on a committee that would determine which contractors were placed on the MATOC list, in exchange for the official’s official assistance in placing the two businesses with which Desai was affiliated on the list. On Oct. 18, 2012, and Dec. 6, 2012, Desai made two cash payments, totaling $1,000, to the aforementioned official in exchange for the official’s official assistance in placing the two businesses with which he was affiliated on the VA’s MATOC list.
The count to which Desai pleaded guilty carries a maximum potential penalty of 15 years in prison, a $250,000 fine, twice the aggregate loss to victims or gain to the defendant, or three times the amount of the bribe payments. Sentencing is scheduled for Oct. 2, 2013.
U.S. Attorney Fishman credited special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford for the investigation in this case.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division in Newark.13-270
Defense counsel: Theodore Margolis, Bridgewater, N.J.
Desai Information
Brooklyn Woman Convicted of Shipment of $1 Million Worth of Stolen Luxury Vehicles to AfricaRead the Press Release
CAMDEN, N.J. – A federal jury convicted Hope K. Kantete today for her role as the leader of a ring that was responsible for shipping dozens of stolen and carjacked luxury cars and SUVs worth more than $1 million from New Jersey to Africa.
Kantete, 43, of Brooklyn, was convicted of 10 counts of transportation of stolen vehicles in interstate or foreign commerce and a single count of conspiracy to transport stolen vehicles in interstate or foreign commerce. Kantete was convicted after a three-week trial before U.S. District Judge Robert J. Kugler in Camden federal court.
After the jury returned its verdict, Kantete’s bail was revoked in anticipation of her sentencing date on Oct. 3, 2012. As a result of the conviction, Kantete faces up to 15 years in prison.
According to documents filed in this case and the evidence presented at trial:
The stolen car exportation ring was investigated by a multi-agency task force led by the U.S. Department of Homeland Security/Immigration and Customs Enforcement. The investigation revealed that Kantete employed other individuals who were responsible for purchasing stolen and carjacked vehicles from thieves operating in Northern New Jersey and New York. Kantete then had individuals “re-tag,” or place new vehicle identification numbers, on the stolen cars and create fraudulent title documents so that the cars could be shipped out of the country. After the documents were created, Kantete arranged to have the cars loaded onto shipping containers and sent to ports in West Africa. The cars could be re-sold in West Africa for at least twice their retail value in the United States.
U.S. Attorney Fishman credited special agents of HSI, under the leadership of Executive Associate Director James Dinkins and Special Agent in Charge Andrew M. McLees, and the N.J. State Police, under the direction of Superintendent Col. Rick Fuentes, for the investigation leading to today’s arrests. He also thanked U.S. Customs and Border Protection; the Waterfront Commission of New York Harbor; Essex County Prosecutor Carolyn Murray, Middlesex County Prosecutor Andrew Carey, Acting Hudson County Prosecutor Gaetano T. Gregory, and Union County Acting Prosecutor Grace H. Park, the Essex and Hudson County Sheriff’s Departments, the Newark Police Department, the U.S. Coast Guard Investigative Service and the Port Authority of New York and New Jersey for their roles.
The government is represented by Assistant U.S. Attorney José R. Almonte and James M. Donnelly of the U.S. Attorney’s Office Criminal Division in Newark.13-272
Defense counsel: Brian J. Neary Esq., Hackensack, N.J.
Former New Jersey Lawyer Sentenced to 33 Months in Prison for Embezzling More Than $885,000 in Law Firm FundsRead the Press Release
TRENTON, N.J. – A former partner of a law firm based in Freehold, N.J., was sentenced today to 33 months in prison for defrauding the firm and its clients by improperly diverting more than $885,000 from the law firm, U.S. Attorney Paul J. Fishman announced.
Timothy Provost, 58, of Millstone Township, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of mail fraud. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Provost admitted that between April 2004 and January 2011, he embezzled from the law firm, which was not identified in court documents, by wrongfully writing checks from its attorney trust and business accounts to himself and his personal creditors to pay for his and his family’s personal expenses, including his mortgage, his children’s tuition and horse stable expenses. Provost then mailed some of the checks to his personal creditors. He further admitted to attempting to hide his theft by using the stolen funds to purchase cashier’s checks payable to his creditors or to himself.
Provost, who was a partner at the firm, had access to the law firm’s bank accounts in order to conduct real estate transactions on behalf of clients, including closings and refinancings. Provost’s embezzlement left several clients with double mortgages, which insurance then stepped in to cover. In total, Provost stole more than $885,000 from the attorney trust and business accounts for his personal benefit.
In addition to the prison term, Judge Shipp sentenced Provost to three years of supervised release and ordered him to pay $887,134 in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Office Criminal Division in Trenton.
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Defense counsel: Nicholas Caliendo Esq., Freehold, N.J.
Essex County, N.J., Woman Who Scammed Credit Card Numbers to Buy Luxury Items Sentenced to Seven Years in Federal PrisonRead the Press Release
TRENTON, N.J. – An Essex County, N.J., woman who admitted using stolen credit card numbers to purchase $133,000 worth of high-end merchandise was sentenced today to 84 months in prison, U.S. Attorney Paul J. Fishman announced.
Melody Macken, 50, of Irvington, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an indictment charging her with unlawfully using credit card numbers issued to others without their authorization. Judge Pisano imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From February 2010 through November 2011, Macken acquired stolen credit card account numbers by calling retailers and store customers and claiming to be a store employee. Using the stolen credit card numbers and other personal identification information, she purchased items such as mattresses, appliances, electronics, luxury apparel, accessories and shoes – with a total value of more than $133,000.
In calculating Macken’s sentence, the court took into account a previous conviction and Macken’s alleged activities since her guilty plea in this case. While out on bail, Macken allegedly violated the conditions of her federal pretrial release by committing a new crime, following the same scheme, just months after entering her guilty plea. As a result, her bail was revoked and she was remanded into the custody of the U.S. Marshals pending today’s sentencing. She remains in federal custody.
In addition to the prison term, Judge Pisano sentenced Macken to serve three years of supervised release and ordered her to pay $147,592 to victim retailers.U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
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Defense counsel: David Oakley and Mark Anderl Esqs., Perth Amboy, N.J.Rapper Fat Joe Sentenced to Four Months in Prison for Failing to File Income Tax Returns on over $3.3 in Taxable IncomeRead the Press Release
NEWARK, N.J. – Joseph Cartagena, the rapper popularly known as “Fat Joe,” was sentenced to four months in prison for failing to file tax returns with the IRS, U.S. Attorney Paul J. Fishman announced.
Cartagena, 42, of Miami Beach, Fla., previously pleaded guilty before U.S. Magistrate Judge Cathy L. Waldor to Counts One and Two of a four-count information charging him with failing to file a tax return for tax years 2007 to 2010. Those two counts correlate to tax years 2007 and 2008. Under the terms of the plea agreement, however, the tax loss for all four years, including 2009 and 2010, was taken into account for sentencing.
According to documents filed in this case and statements made in court:Cartagena received income for his musical performances as well as royalties on the sales of his music. These monies came from three different sources: Terror Squad Production Inc. (Terror Squad), Miramar Music Touring Inc. (Miramar), and FJTS Corp. Cartagena owned Terror Squad and Miramar, both of which are corporations based in Somerville, N.J.
Cartagena admitted he received gross income in excess of $1.18 million in 2007, in excess of $1.28 million in 2008, in excess of $265,000 in 2009, and in excess of $630,000 in 2010. The total tax loss to the government was $718,038.
In addition to the prison term, Judge Waldor sentenced Cartagena to one year of supervised release and fined him $15,000. He must report by Aug. 26, 2013, to begin serving his sentence.
U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s sentence.
The case is being prosecuted by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Healthcare and Government Fraud Unit.
12-266Defense counsel: Jeffrey Lichtman Esq., New York
Former Essex County, N.J., Sheriff’s Officer Admits Collecting A Debt Through ExtortionRead the Press Release
NEWARK, N.J. – A Monmouth County, N.J., man admitted today to conspiring to collect a debt using extortionate means, U.S. Attorney Paul J. Fishman announced.
John Balsamo, 49, of West Long Branch, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden to an indictment charging him with using threats of violence and economic harm to collect a debt from the victim, an Ocean County, N.J., construction contractor.
According to documents filed in this case and statements made in court:
Balsamo and conspirators Timothy Kelly, 37, of Jersey City, N.J., and Robert C. Bantang, Jr., 44, of Oceanport, N.J., used extortionate means in order to collect $50,000 the contractor owed to Kelly from 2009. The conspirators made the victim believe that the money he had borrowed from Kelly was owed to the “Old Man,” a member of organized crime who would cause physical harm to the victim if the debt was not paid. Balsamo also displayed a key to a construction site where the victim was working in Brick, N.J., and warned that the key could be used to gain access to, and cause damage to the site, due to the victim’s failure to fully repay the debt. Balsamo and Kelly sent Bantang to the construction site on three occasions to deliver threats purportedly on behalf of the “Old Man.”
On March 24, 2011, Balsamo and Kelly went to the Brick construction site, which was now a completed restaurant, to confront the victim. Kelly told the victim that if he had brought his “boys” that it would have gotten “done right in here, right in this place, right like this, in front of everybody . . . and your wife gets it too.” Kelly also told the victim that he deserved “a beatin’ just out of f- - kin’ principle.” Balsamo warned that the “Old Man” wanted to “beat the shit” out of the restaurant owner due to the victim’s failure to repay the debt, which Balsamo and Kelly now stated had grown to $70,000. Balsamo also advised the victim that the “Old Man” has been “promoted,” implying that the “Old Man” now possessed a higher position in organized crime.
During the course of the conspiracy, Balsamo received a Rolex watch and $2,500 in cash from the victim towards payment of the debt.
Kelly and Bantang previously pleaded guilty in February 2012 to conspiring to collect a debt from the victim using extortionate means, before U.S. District Judge Katharine S. Hayden.
The two men are scheduled for sentencing on Sept. 10, 2013.Balsamo faces a maximum potential penalty per count of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Oct. 8, 2013.
Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and special agents of the N.J., State Commission of Investigation, under the direction of Executive Director Philip James Degnan, for the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Economic Crime Unit in Newark.
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Defense Counsel: John Yauch Esq., Assistant Federal Public Defender, NewarkBalsamo Indictment
Business Owner Admits Evading Taxes on More Than $300,000Read the Press Release
NEWARK, N.J. – A Morris County, N.J., man today admitted evading personal income taxes on more than $300,000 in income over four years, U.S. Attorney Paul J. Fishman announced.
Robert Schaefer, 63, of Montville, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with tax evasion.
According to documents filed in this case and statements made in court:
Schaefer owned and operated Asphalt Maintenance and Stripping Inc. (Asphalt Maintenance), an asphalt installation, maintenance, and snow removal company, also located in Montville. Schaefer was required to include income earned by Asphalt Maintenance on his individual IRS 1040 form. During the calendar years 2007 through 2011, Schaefer diverted approximately $303,000 in income earned by Asphalt Maintenance to himself and his personal accounts. He did this by arranging for Asphalt’s customers to pay for service by cash and by checks payable to “cash” or to “Robert Schaefer.” Schaefer then cashed these checks, retained the proceeds for his personal use, and failed to include the proceeds on individual income tax form 1040 that he signed and filed with the IRS.
Tax Year
Approximate Date
Tax Return Filed
Approximate
Unreported Income
Approximate
Tax Due and OwingApril 15, 2008
$ 44,651
$ 11,665
2008
April 15, 2009
74,754
22,618
2009
April 15, 2010
77,180
23,236
2010
April 15, 2011
54,508
8,495
2011
April 15, 2012
51,866
12,555
The count of tax evasion to which Schaefer pleaded guilty is punishable by a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Oct. 10, 2013.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Lorraine S. Gerson of the Economic Crimes Unit in Newark.
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Defense counsel: Alan Zegas Esq., Chatham, N.J.
Schaefer Information
Newark Man Charged in Gunpoint Sandwich Shop RobberyRead the Press Release
NEWARK, N.J. – FBI special agents arrested a Newark man at his home this morning in connection with an armed robbery of a Subway restaurant in Verona, N.J., U.S. Attorney Paul J. Fishman announced.
Jamar Darby, 26, is charged by criminal complaint with one count of committing a Hobbs Act robbery and one count of using a firearm during a crime of violence. He appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was held without bail.
According to the criminal complaint filed today:
Between December 2012 and May 2013, Darby participated in a number of armed robberies of New Jersey commercial establishments throughout Essex and Union counties.
For example, on May 20, 2013, Darby brandished a handgun as he and two other men entered the Verona Subway. Darby and another robber restrained a Subway employee by tying the employee’s hands and feet with plastic zip ties and stole money from the cash register before fleeing.
The Hobbs Act charge carries a maximum potential penalty of 20 years in prison. The gun charge carries a maximum potential penalty of life in prison and a mandatory minimum of seven years in prison, which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s arrest. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus and Verona Police Departments, along with the New Jersey State Police and the Essex County Prosecutor’s Office for their work on this case.
The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Defense counsel: Carl Herman Esq., West Orange, N.J.
Darby Complaint
Newark Man Charged in Gunpoint Sandwich Shop RobberyRead the Press Release
NEWARK, N.J. – FBI special agents arrested a Newark man at his home this morning in connection with an armed robbery of a Subway restaurant in Verona, N.J., U.S. Attorney Paul J. Fishman announced.
Jamar Darby, 26, is charged by criminal complaint with one count of committing a Hobbs Act robbery and one count of using a firearm during a crime of violence. He appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was held without bail.
According to the criminal complaint filed today:
Between December 2012 and May 2013, Darby participated in a number of armed robberies of New Jersey commercial establishments throughout Essex and Union counties.
For example, on May 20, 2013, Darby brandished a handgun as he and two other men entered the Verona Subway. Darby and another robber restrained a Subway employee by tying the employee’s hands and feet with plastic zip ties and stole money from the cash register before fleeing.
The Hobbs Act charge carries a maximum potential penalty of 20 years in prison. The gun charge carries a maximum potential penalty of life in prison and a mandatory minimum of seven years in prison, which must run consecutively to any other prison term. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s arrest. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus and Verona Police Departments, along with the New Jersey State Police and the Essex County Prosecutor’s Office for their work on this case.
The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Defense counsel: Carl Herman Esq., West Orange, N.J.
Darby Complaint
Chairman of Woodland Park, N.J., Democratic Committee Admits Bribing an IRS OfficialRead the Press Release
CAMDEN, N.J. – The chairman of the Woodland Park, N.J., Democratic Committee admitted today that he bribed two individuals he thought were IRS officials so that he could eliminate his tax debt, U.S. Attorney Fishman announced.
Michael Kazmark, 60, of Woodland Park pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of bribing a federal public official in exchange for official action. He admitted making $18,500 in corrupt payments.
According to documents filed in this case and statements made during Kazmark’s guilty plea proceeding:
Kazmark failed to pay federal income taxes from 1997 through 2005. In 2010, Kazmark owed the IRS $98,046 in unpaid federal income taxes, interest and penalties. On April 18, 2010, Kazmark made an application to the IRS for an offer in compromise, requesting that he pay $48,800 to the IRS in order to settle his entire federal tax debt.
On Oct. 5, 2010, Kazmark paid a $1,000 bribe to two individuals he thought were IRS officials in exchange for their official assistance in transferring his offer in compromise file to one of the officials so that the official could accept it. On Nov. 23, 2010, Kazmark made a $17,500 bribe payment to the individuals in exchange for their official assistance in placing his federal tax liability in noncollectible status for two years and agreeing to accept Kazmark’s offer in compromise for the amount of the check that he had already paid to the IRS – $9,760 – if he did not incur any additional federal tax liability for two years.
The count to which Kazmark pleaded guilty is punishable by a maximum potential penalty of 15 years in prison, a $250,000 fine, twice the aggregate loss to victims or gain to the defendant, or three times the amount of the bribe payments. Sentencing is scheduled for Sept. 28, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of the U.S. Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Robert Geary, for the investigation leading to today’s guilty plea.The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
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Defense counsel: Miles Feinstein Esq., Clifton, N.J.
Kazmark Information
Oklahoma Man Arrested and Charged with Stealing More Than $2.8 Million in Textbooks from Former EmployerRead the Press Release
NEWARK, N.J. – An Oklahoma man who was previously employed as a textbook salesman at Hoboken-based John Wiley & Sons will appear in court today on charges he stole more than $2.8 million in textbooks from his former employer through an elaborate scheme that involved diverting free educational samples intended for professors, U.S. Attorney Paul J. Fishman announced.
Christopher J. Brock, 44, of Yukon, Okla., was arrested in Tampa, Fla., today by FBI special agents on a criminal Complaint charging him with wire fraud. The defendant is scheduled to have his initial appearance and bail hearing this afternoon before U.S. Magistrate Judge Anthony E. Porcelli in Tampa, Fla., federal court.
According to the Complaint unsealed today in Newark federal court:
Christopher J. Brock executed a scheme to defraud his former employer, John Wiley & Sons (Wiley), out of more than $2.8 million worth of textbooks.
Wiley is based in Hoboken, N.J., and is one of the largest publishers of technical writing in the world, with an estimated market value of approximately $3 billion. A portion of Wiley’s publications are collegiate textbooks, which are distributed to schools and universities that accept them into their curricula. Co-existing with Wiley’s retailers are resellers of used or unwanted books that buy and sell directly to students.
Brock lived in Oklahoma and was employed by Wiley, first as a higher education publishing representative, and most recently as a district sales supervisor based in Oklahoma.
Brock accessed the corporate systems of Wiley – including computers located in New Jersey – and diverted to himself more than 16,000 textbooks and other items he fraudulently designated as free educational samples.
To avoid detection in an internal review of his employee records, Brock designated both actual and fabricated professors as the purported recipients of the items and listed his own home address and other addresses that he controlled as alternate shipping addresses for those professors, directing that the books be shipped to those addresses. This made it appear in the records of Wiley that the free education samples were legitimately going to professors when, in reality, they were being sent to Brock.
Once Brock received the diverted textbooks he sold them to resellers and received payment through PayPal accounts that he controlled. PayPal, in turn, would deposit the funds into bank accounts that Brock controlled. Brock caused an approximate loss to Wiley of more than $2.8 million. The money that Brock earned as a result of the scheme was largely used for personal expenditures, including, among other things, high-end home furnishings and scuba diving equipment.
The wire fraud count with which Brock is charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation. U.S. Attorney Fishman also thanked John Wiley & Sons for its cooperation and assistance with the investigation.
The government is represented by Assistant U.S. Attorney Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charge and allegations contained in the Complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Brock, Christopher Complaint
New Jersey Man Sentenced to Prison for Lying to Terrorism InvestigatorsRead the Press Release
NEWARK, N.J. – A Bayonne, N.J., man was sentenced today to 18 months in prison for lying to officials investigating Mohamed Alessa and Carlos E. Almonte – who were subsequently convicted of a conspiracy to travel from New Jersey to kill on behalf of a terrorist group in Somalia – U.S. Attorney Paul J. Fishman announced.
Mohamed Osman, 21, previously pleaded guilty before U.S. District Judge Dickinson R. Debevoise to making materially false statements to investigators in a matter involving international terrorism.
According to documents filed and statements made in Newark federal court:
During a June 2010 interview with members of the FBI’s Joint Terrorism Task Force (JTTF), Osman falsely denied knowing about Alessa and Almonte’s plans to travel to Somalia to fight against government and multinational peacekeeping forces there.
Among other things, Osman specifically admitted that he had learned about Alessa and Almonte’s ideology and beliefs during their interactions, and that he had heard Alessa say he would start killing in the United States if he was unable to do it abroad. Osman also admitted that he willfully lied to investigators after being informed that they were conducting an international terrorism investigation and that it was against the law to make false statements during the interview.In addition to the prison term, Judge Debevoise ordered Osman to serve three years of supervised release.
U.S. Attorney Fishman praised the outstanding work of the FBI; members of the Newark JTTF, including the New Jersey State Police; and the New York City Police Department in the investigation.
The government is represented by Andrew Kogan, Chief, and Assistant U.S. Attorney L. Judson Welle of the United States Attorney’s Office National Security Unit in Newark.
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Defense counsel: Stacy Ann Biancamano Esq., West Orange, N.J.New Jersey Husband and Wife Tax Preparers Charged with Tax Fraud, Wife ArrestedRead the Press Release
NEWARK, N.J. – A tax preparer was arrested this morning at her Union, N.J., home for allegedly teaming up with her tax preparer husband to get unearned tax refunds for their clients to make extra money for themselves, U.S. Attorney Paul J. Fishman announced.
Special agents of IRS-Criminal Investigation (IRS-CI) arrested Carol Johnson, 42, on an indictment charging her and her husband, Courtney Johnson, 43, each with one count of conspiracy to defraud the United States and six counts of assisting in the preparation of fraudulent tax returns. Courtney Johnson remains at large. The pair operated tax preparation businesses in South Orange and Jersey City, N.J., through which they allegedly committed crimes resulting in tax losses of nearly $400,000.
Carol Johnson is expected to appear this afternoonbefore U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the indictment unsealed today:
From tax years 2005 through 2007, the Johnsons sought to generate increased referrals, enhance their business and enrich themselves by preparing and filing income tax returns that were based on false information for the purpose of generating tax refunds.
To do this, the Johnsons routinely used a number of fraudulent practices, including falsely claiming a filer was a “head of household”; inventing and inflating deductions; creating fictitious businesses with bogus incomes and losses; and creating false credits for education, childcare and moving expenses.
Although taxpayers generally met with one of the defendants to provide information to prepare their tax returns, it was routinely the other defendant whose name appeared as preparer of the return.
On several occasions, the defendants stole part of the refunds by issuing Santa Barbara Bank cashier’s checks payable to their clients, forging the client’s signatures and depositing the checks into a bank account they controlled.
On at least one occasion, the Johnsons filed two federal income tax returns for the same year for the same client, providing a copy of the return with a several-hundred-dollar refund to the taxpayer and a copy with a several-thousand-dollar refund to the IRS.
The bogus returns resulted in a tax loss of nearly $400,000.
The conspiracy charge carries a maximum potential penalty of five years in prison. Each false tax return count carries a maximum potential penalty of three years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of IRS-CI, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation.
The government is represented by Assistant U.S. Attorney Lorraine Gerson of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:Carol Johnson: Leslie Sinemus Esq., South Orange
Johnson, Courtney and Carol Indictment
Owner of Telecommunications Companies Admits Role in International Phone Hacking ConspiracyRead the Press Release
Revenue share fraud cost companies millions in losses
NEWARK, N.J. – A German citizen today admitted his role in an international conspiracy that hacked into the telephone systems of large corporations and entities in the United States and around the world to make telephone calls, causing tens of millions of dollars in losses, U.S. Attorney Paul J. Fishman announced.
Wolfgang Uelpenich, 44, of Zug, Switzerland, pleaded guilty before U.S. District Judge Katharine Hayden in Newark federal court to an information charging him with conspiracy to commit wire fraud. Uelpenich was arrested by FBI agents at a Key West, Fla., on Jan. 9, 2012.According to documents filed in this case and statements made in court:
Uelpenich, who owned telecommunications companies in Germany, conspired with others to profit by causing unauthorized telephone calls to be placed to Revenue Share Numbers (RSNs).Also known as international premium numbers, RSNs offer such services as adult entertainment, chat lines, and psychic hotlines on a cost-per-minute basis. Telephone companies that carry calls to overseas RSNs (known as Revenue Share Providers [RSPs]) are typically paid an internationally-regulated fee for connecting such calls.
To increase profits by increasing call traffic, some RSPs and others illegally use stolen telephones to make unauthorized calls, generating additional revenue, which the RSPs shared with the people or entities (known as “dialers” or “callers”) making the unauthorized calls. A recent telecommunications industry association report estimated $3.84 billion annually in revenue share fraud.
The scheme involved the theft of long distance telephone service, either through the theft of cell phone service or through a process known as “PBX hacking.” Hackers targeted PBX (Private Branch Exchange) telephone systems of corporations and placed calls to those systems in an attempt to identify telephone extensions that are not in use. Once an unused extension was identified, hackers illegally reprogrammed the telephone system. The hacked telephone system could then be used by the hackers and others to make long distance telephone calls that are charged back to the victim corporation, creating virtually free telephone lines through which they could make calls. These “free” telephone lines were then used to call RSNs controlled by defendant Uelpenich and others.
Noor Aziz, 50, a fugitive last known to have resided in Pakistan, and others obtained access to hacked PBX systems or cell phones that had been activated with fraudulent information and used those phone lines to originate telephone calls to RSNs controlled by a conspirator and Uelpenich in Slovenia, Liechtenstein, Austria and elsewhere.
The RSNs that Uelpenich controlled and provided to Aziz frequently contained no actual content – they did not have adult entertainment or chat rooms – and could never generate legitimate fees for the RSPs. Telephone company representatives who suspected fraudulent activity on these phony RSNs found they frequently had recordings of fake rings, fake password prompts, fake voicemail messages, music, or dead air on continuous loops, all to make it appear they were legitimate sites.
As a result of the conspiracy, telephone companies and the hacked entities lost tens of millions of dollars due to more than 13 million minutes of telephone calls over 4,800 hacked PBX systems. Uelpenich’s conduct between 2010 and 2012 was responsible for approximately $1 million in losses. The case was charged in New Jersey, where AT&T has a major operating center in Somerset County and a fraud detection center in Middlesex County.
The count to which Uelpenich pleaded guilty is punishable by a maximum potential penalty of five years in prison and a fine of up to $250,000 or twice the gain or loss. Sentencing is scheduled for July 15, 2013.
U.S. Attorney Fishman credited the special agents of the FBI Newark Division, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of the FBI Miami Division, under the direction of Special Agent in Charge Michael B. Steinbach, for the investigation leading to today’s guilty plea. The investigation, which relates to conduct ranging from November 2008 through January 2012, is ongoing.The government is represented by Assistant U.S. Attorney Erez Liebermann, Deputy Chief of the office’s Criminal Division.
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Defense Counsel: Alan Kaufman Esq., New York
Uelpenich, Wolfgang Information
Newark, N.J., Man Sentenced to More Than 16 Years in Prison for Illegal Firearm/drug PossessionRead the Press Release
CAMDEN, N.J. – A Newark, N.J., man who was convicted earlier this year on drug and weapons charges was sentenced today to 200 months in prison, U.S. Attorney Paul J. Fishman announced.
Jimmil Henderson, 30, was convicted by a federal jury on Jan. 29, 2013, on all three counts of a superseding indictment: possession of cocaine and marijuana with intent to distribute, possession of a firearm in furtherance of a drug trafficking offense and unlawful possession of a loaded handgun by a convicted felon. Henderson was convicted following a five-day trial before U.S. District Judge Joseph H. Rodriguez, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence at trial:
On Feb. 18, 2011, Newark Police Department officers were patrolling the area of Lincoln Park in Newark and saw Henderson engaging in a hand-to-hand drug transaction. Upon seeing the officers, Henderson ran through Lincoln Park, tossing a 9mm firearm loaded with 11 rounds of ammunition into the park. When the officers apprehended him at the corner of Broad and Pennington streets, they recovered quantities of cocaine and marijuana.
In addition to the prison term, Judge Rodriguez sentenced Henderson to five years of supervised release.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Thomas J. Cannon; and the Newark Police Department, under the direction of Police Director Samuel A. DeMaio and Chief Sheilah A. Coley, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Dara A. Govan and Special Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
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Defense counsel: Michael Huff Esq., PhiladelphiaFour Men Arrested for Armed Robbery of New Jersey Target Store on Black FridayRead the Press Release
NEWARK, N.J. – FBI special agents and Union Police Department detectives arrested four New Jersey men this morning in connection with the armed robbery last November of a Target Store in Union, N.J., on “Black Friday,” U.S. Attorney Paul J. Fishman announced.
Darrell A. Carter, 23, of Irvington, Daquaan Vaughn, 35, of Newark, Lavell Jones, 27, of East Orange, and Maryland Liggins, III, 28, of Newark, are charged in a criminal complaint with one count of committing a Hobbs Act robbery. Carter and Vaughn are each charged with an additional count of using a firearm in furtherance of a crime of violence.
All four defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Michael Hammer in Newark federal court.According to the complaint unsealed today:
On Nov. 23, 2012, Carter, Vaughn, Jones and Liggins allegedly carried out an armed robbery of the Target store located on Springfield Avenue in Union on Black Friday – the day after Thanksgiving – which is considered to be one of the busiest shopping days of the year. The defendants each allegedly played different roles in the robbery: Carter and Vaughn entered the store and robbed the store’s employees at gunpoint; Liggins served as the getaway driver; and Jones posed as a shopper in the store and acted as a lookout.
Carter and Vaughn entered the store at 9:47 p.m. and hid in an employee bathroom. An employee eventually attempted to enter the bathroom and Carter and Vaughn physically grabbed the employee, brandishing handguns. Carter and Vaughn restrained the employee’s hands with zip-ties and then demanded the security code to access the store’s cash room. Carter and Vaughn obtained the code from the employee and used it to access a secure hallway that leads to the cash room, where they waited for employees to transport a cash cart from the store’s cash registers to the cash room when the store closed. Carter and Vaughn then rushed into the cash room brandishing guns, ordered the employees to lie on the ground, and stole more than $50,000 from a safe in the cash room before exiting the store and running out to a vehicle driven by Liggins that was parked on the shoulder of nearby Route 78.
The charge of Hobbs Act robbery is punishable by a maximum potential penalty of 20 years in prison. The charge of using a firearm in furtherance of a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years, which must run consecutively to any other prison term. Each of these counts also carries a maximum fine of $250,000.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the arrest and charges. He also thanked the Union Police Department for its role in the investigation and Target corporate security for its cooperation.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office General Crimes Unit in Newark.The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-257Carter, Darrell A. Et Al. Complaint
South Jersey Woman Sentenced to Prison for Defrauding FEMA After Major DisasterRead the Press Release
CAMDEN, N.J. – An Atlantic City, N.J., woman was sentenced today to 27 months in prison for stealing benefit money from FEMA through fraud relating to a presidential disaster declaration for the state of New Jersey after the nor’easter in 2010, U.S. Attorney Paul J. Fishman announced.
Debbie Hicks, 52, previously pleaded guilty to an information charging her with disaster benefits fraud and making false statements to the U.S. Department of Housing and Urban Development. She entered her guilty plea before U.S. District Judge Joseph E. Irenas, who imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Due to FEMA’s size and the large number of victims typically resulting from a disaster, FEMA frequently has been targeted in disaster fraud schemes by individuals or groups seeking FEMA monetary assistance for benefits to which they were not entitled.
On April 12, 2010, Hicks filed an application with FEMA seeking federal rental assistance under FEMA’s Individual Assistance Program, claiming that her apartment in Atlantic City was damaged as a result of the severe storm and was unfit for occupancy.
On April 13, 2010, a FEMA inspector confirmed Hicks’ occupancy and the damage to her rental unit, and declared her apartment uninhabitable. FEMA then awarded Hicks $923 per month in rental assistance. In her application to FEMA Hicks failed to disclose that her rent was being paid by the Atlantic County Department of Family and Community Development.
During the plea hearing, Hicks admitted that she lied on various forms that were sent to FEMA in order to continue receiving money. As a result of the fraud, Hicks received $15,691 in FEMA emergency rental assistance funds to which she was not entitled.
Hicks also admitted that, while she was defrauding FEMA, she lied to the Housing Authority and Urban Redevelopment Agency of the City of Atlantic City, which administers housing funds on behalf of U.S. Department of Housing and Urban Development (HUD). Hicks admitted that, when she applied for Section 8 housing, she failed to tell the housing authority that she was receiving funds from both FEMA and the Atlantic County Department of Family and Community Development. Hicks also admitted she lied about her prior criminal record and the fact that she had used other names and Social Security numbers.
In addition to the prison term, Judge Irenas sentenced Hicks to serve three years of supervised release and ordered her to pay $15,691 in restitution to FEMA and $7,200 to HUD.
U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Gregory Null, and special agents of HUD, Office of Inspector General, under the direction of Special Agent in Charge Joseph W. Clarke, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden
Ocean County, N.J., Man Admits Sexually Abusing Toddler and Streaming Assault Live over the InternetRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., man today admitted sexually abusing a 15-month-old boy and streaming footage of the assault over the Internet, U.S. Attorney Paul J. Fishman announced.
Rodford W. Brindley, 68, of Toms River, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of sexual exploitation of a child.
According to documents filed in this case and statements made in court:
Brindley engaged in online chats with someone who he believed to be a parent living in Ohio, but who was, in fact, a law enforcement officer in Ohio. On one occasion, Brindley engaged in sexually explicit conduct with an approximately 15-month-old child, whom he had in his care at his Toms River home, and streamed live video of that conduct over the Internet to Ohio undercover law enforcement officers.
The charge of child sexual exploitation is punishable by a mandatory minimum penalty of 15 years in prison and a maximum potential penalty of 30 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 26, 2013.U.S. Attorney Fishman thanked the Franklin County Sheriff’s Department in Ohio, the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; and the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Trenton Office.
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Defense counsel: William Cunningham Esq., Brick, N.J.Brindley, Rodford Information
British National Admits Role in Cocaine Smuggling ConspiracyRead the Press Release
NEWARK, N.J– An extradited British national today admitted his role in an organization that smuggled cocaine aboard commercial airlines from the West Indies to England via the United States, U.S. Attorney Paul J. Fishman announced.
Prine George Alfonso Jones, a/k/a “Prince,” 47, of Birmingham, Great Britain, pleaded guilty to an information charging him with conspiracy to import and to export cocaine. Jones was arrested on Feb. 4, 2009, in Great Britain, for allegedly transporting narcotics directly from St. Lucia to Great Britain. Jones was extradited from Great Britain and had his initial appearance on narcotics conspiracy charges in December 2012.
According to documents filed in this and related cases and statements in court:
Jones was involved in an organization whose members included Nigel Roberts, a/k/a “Skang,” another British national who previously pleaded guilty to related charges. The organization acquired cocaine in Jamaica and St. Lucia, concealed it in luggage, and provided that cocaine-filled luggage to drug couriers, who transported it by commercial airlines to Great Britain after making intermediate stops in the United States. Jones admitted to his role as a British operative of the organization who would provide transport to drug couriers and the narcotics that they smuggled.
Today’s guilty plea stems from a multi-jurisdictional and international investigation into narcotics trafficking that has resulted in multiple narcotics seizures and the charging of 14 individuals to date. Jones is the 14th member of this international cocaine trafficking ring to have pleaded guilty in the District of New Jersey.
The conspiracy charge to which Jones pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for July 8, 2013.
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees; and the Drug Enforcement Administration’s New Jersey Division under the direction of Acting Special Agent in Charge Robert G. Koval, in coordination with police officers of the West Midlands Police Complex Casework Unit in Birmingham, England, for the investigation leading to today’s plea. U.S. Attorney Fishman also thanked the Department of Justice’s Office of International Affairs for its assistance in obtaining Jones’s extradition.
The case is being prosecuted by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office in Trenton.13-255
Defense counsel: Olubukola O. Adetula, Esq., Irvington, N.J.
Jones, Prine Supersedimg Information
Former Part-Owner of Litigation Funding Company Admits Defrauding Business Partners in $869,492 Kickback ConspiracyRead the Press Release
NEWARK, N.J. – The former part-owner and underwriter for New York-based litigation funding company The Law Funder LLC, admitted today in Newark federal court to participating in a secret kickback scheme that defrauded his former business partners of approximately $869,492, U.S. Attorney Paul J. Fishman announced.
Mathew Sheldon, 39, of New York, pleaded guilty today before U.S. District Judge Dennis M. Cavanaugh to a superseding information charging him with conspiracy to commit wire fraud through the deprivation of honest services.
According to documents filed in this case and statements in court:
The Law Funder, which extends loans to plaintiffs in pending civil litigation, did business with Montclair Funding Group LLC (“MFG”) – at one time headquartered in Union City, N.J. – and its owner Rory Donadio, 43, of New York. MFG was a broker between plaintiffs seeking advances against potential recoveries in pending litigation and private entities such as Law Funder. In exchange for a broker’s fee, MFG would, among other things, gather necessary information and documents in support of funding opportunities so Law Funder could evaluate whether to fund a case and for how much. Sheldon was a 25 percent owner in Law Funder and supervised the underwriting process for the company.
Sheldon admitted that from approximately February 2005 through July 2009, he conspired with Donadio to design and execute a secret kickback scheme. Sheldon would offer certain of Law Funder’s investment opportunities to MFG in exchange for personally receiving a portion of each broker’s commission Law Funder paid MFG. Sheldon and Donadio agreed to conceal their fee-splitting arrangement from Law Funder and Sheldon’s three partners. The kickback scheme resulted in approximately $869,492 in fraudulent payments to Sheldon, which were paid by wire transfer and other means.
Sheldon also admitted that he and Donadio concealed the scheme by, among other methods, using code such as “Giants” or the letter “G” in records referring to related transactions. He acknowledged he regularly communicated with Donadio to identify the coded transactions and calculate the amount payable to Sheldon pursuant to the kickback scheme.
The conspiracy count to which Sheldon pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross amount of pecuniary gain or loss resulting from the offense. Sentencing is scheduled for Oct. 7, 2013.
Donadio also has pleaded guilty in connection with the scheme and awaits sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and inspectors of the United States Postal Inspection Service, Newark Division, under the direction of Maria L. Kelokates, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky, Mala Ahuja Harker and Jenny Kramer of the U.S. Attorney’s Office Economic Crimes Unit, and Evan Weitz of the office’s Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.13-251
Defense counsel: Assistant Federal Public Defender Patrick N. McMahon Esq.Sheldon Superseding Information
Former Employee of Timeshare Consulting Firm Pleads Guilty to Fraud Conspiracy and Unemployment FraudRead the Press Release
CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC admitted today to conspiring to defraud owners of timeshare properties, U.S. Attorney Paul J. Fishman announced.
Ryan E. Bird, a/k/a “Chris Jackson,” a/k/a “Matthew Bross,” 35, of Clementon, N.J., pleaded guilty before U.S. District Court Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to commit mail and wire fraud and one count of wire fraud.
According to documents filed in this case and statements made in court:The Vacation Ownership Group, a/k/a VO Group LLC (VO Group), purported to offer consulting services to owners of timeshares, including timeshare cancellation services. In April 2010, Bird started working at the VO Group and was trained by Adam Lacerda and VO Group managers to call customers using prepared scripts. Bird would call customers and give them the false impression that he was working for a bank or lending institution. Bird then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. After hearing Bird’s false representations, some customers sent checks to the VO Group. Bird admitted to causing more than $200,000 in losses.
Bird also admitted to devising a separate scheme to defraud the N.J. Department of Labor by collecting unemployment compensation benefits while working at the VO Group. Bird pleaded guilty to a count charging him with applying for and collecting $18,104 in unemployment compensation benefits to which he was not entitled.
On Jan. 23, 2013, other members of the VO Group were charged in a Superseding Indictment with conspiracy to commit mail and wire fraud and other charges. Additional members of the VO Group were also charged by criminal complaint in April 2012. To date, 13 members of the VO Group, including Bird, have pleaded guilty to conspiring to commit mail fraud and wire fraud. As for the Lacerdas and other defendants who have not been convicted in this case, the charges and allegations against them are merely accusations and they are considered innocent unless and until proven guilty.
The mail and wire fraud conspiracy charge to which Bird pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. The wire fraud charged is punishable by a maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Oct. 3, 2013.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident
Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special
agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for their roles in the investigation leading to these guilty pleas. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.The government is represented by Assistant U.S. Attorneys Alyson M. Oswald and R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: Richard Coughlin Esq., Assistant Federal Public Defender, Camden, N.J.
Bird Information
Bergen County, N.J., Man Admits Giving Corrupt Payments to Dismiss Pending State Criminal ChargesRead the Press Release
NEWARK, N.J. – A Bergen County, N.J., man admitted today that he agreed to give a $10,000 corrupt payment to personnel at the Passaic County Prosecutor’s Office to dismiss criminal charges that were pending against him, U.S. Attorney Paul J. Fishman announced.
Mahmud Hammad, 36, of Rutherford, N.J., pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to an information charging him with knowingly and corruptly offering, giving and agreeing to give a corrupt payment to influence and reward Passaic County Prosecutor’s Office personnel.
According to documents filed in this case and statements in court:
From May 2012 to August 2012, Hammad was a defendant in a criminal case that was pending before the Passaic County Superior Court and was being prosecuted by the Passaic County Prosecutor’s Office. On July 27, 2012, and August 8, 2012, Hammad met with an FBI undercover agent who purported to have access to authorities at the Passaic County Prosecutor’s Office. During these meetings, which were recorded by the undercover agent, Hammad agreed to pay $10,000 to personnel at the Passaic County Prosecutor’s office to have his pending criminal case dismissed. No one at the Passaic County Prosecutor’s Office was involved in the corrupt activity discussed during these meetings. During the meetings, Hammad also gave the undercover agent $1,500 cash as a “good faith” payment.
The count to which Hammad pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 7, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, Newark, for the investigation leading to today’s guilty plea.
The Government is represented by Assistant U.S. Attorney Barbara Llanes of the Special Prosecutions Division in Newark.13-252
Hammad Information
Union County, N.J., Man Charged with Defrauding Sellers on Ebay Online Auction SiteRead the Press Release
NEWARK, N.J. – A Union County man surrendered to law enforcement officers today for allegedly defrauding hundreds of sellers of foreign and antique banknotes on the eBay online auction site, U.S. Attorney Paul J. Fishman said.
David D’Aries, 49, of Summit, N.J., is charged by complaint with one count of mail fraud. D’Aries is expected to make his initial appearance today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the criminal Complaint:
From June 2007 through October 2012, D’Aries devised a scheme to defraud individuals from around the world by posing as a buyer interested in purchasing rare and antique foreign banknotes for bid on eBay. D’Aries, as the winning bidder in approximately 400 eBay transactions, made payment for the auctioned item via PayPal or credit card, received the item from the eBay seller via the United States mail or other commercial interstate carrier, and then falsely claimed to various credit card companies that the item was never received from the seller or was an unauthorized charge. D’Aries posed as three different individuals, including his deceased father, in his fraudulent eBay transactions.
Losses to eBay/PayPal and the various eBay sellers as a result of D’Aries’ fraudulent transactions total approximately $122,000. A search of D’Aries’ home by law enforcement on June 30, 2011, revealed several thousand foreign banknotes and 165 pieces of mail from around the world that were addressed to D’Aries and the other identities he allegedly used.
D’Aries faces a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates in Newark with the investigation leading to today’s arrest. He also thanked the Summit Police Department and the Union County Prosecutor’s Office for their roles in the case.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.13-248
Defense counsel: Alan Zegas Esq., Chatham, N.J.D'Aries, David Complaint
Owner of Northern New Jersey Auto Part Stores Admits Fraud in Tax Returns, Not Including More Than $1.1 Million in Cash IncomeRead the Press Release
TRENTON, N.J. – The owner of several auto parts stores in northern New Jersey admitted today to underreporting on his tax returns more than $1.1 million in cash income that he kept for his personal benefit, U.S. Attorney Paul J. Fishman announced.
Emanuel Marques, of Whippany, N.J., pleaded guilty to an information charging him with one count of subscribing to false personal federal income tax returns. He entered his guilty plea before U.S. District Judge Freda L. Wolfson in Trenton federal court.
According to documents filed in this case and statements made during Marques’s guilty plea proceeding:
Marques admitted that for the tax years 2009 through 2011 he filed U.S. individual income tax returns in which he claimed to report all of his income from his auto parts stores, but which omitted the approximately $1,153,579 in cash he had diverted from the businesses for his personal use. Marques’ intentional failure to disclose true, correct and complete information to the IRS resulted in a tax loss to the United States of approximately $375,869.
As part of his guilty plea, Marques has agreed to make full restitution to the IRS for all losses resulting from his filing of false tax returns. He has also agreed to forfeit $1 million in a related civil case with the U.S. Attorney’s office.
The subscribing to false tax returns charge carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is currently scheduled for Sept. 18, 2013.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle Kitchen, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Evan S. Weitz of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit.
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Defense counsel: George Schneider Esq., NewarkMarques, Emanuel Information
Father and Son Sentenced to Prison in Connection with Bogus Foreclosure Rescue CompanyRead the Press Release
NEWARK, N.J. – A father and son who ran a mortgage loan fraud scheme that succeeded in obtaining $4.4 million in mortgage loans while masquerading as a foreclosure rescue operation were both sentenced to prison today, U.S. Attorney Paul J. Fishman announced.
Vito C. Grippo, 58, of Jackson, N.J., the president of Morgan Financial Equity Shares and Vanick Holdings, LLC, based in Holmdel, N.J., was sentenced to 96 months in prison. He previously pleaded guilty before U.S. District Judge Kevin McNulty to an Indictment charging him with one count of conspiracy to commit wire fraud, two counts of filing a false tax return for the years 2006 and 2007, and one count of aiding and procuring the filing of a false tax return for the year 2008.
Frederick “Freddie” Grippo, 32, of Old Bridge, N.J., formerly a loan officer at Worldwide Financial Resources and an officer of Vanick Holdings, was sentenced to 41 months in prison. He previously pleaded guilty before Judge McNulty to an information charging him with one count of conspiracy to commit wire fraud. Judge McNulty imposed both sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
Between January 2008 and February 2010, Vito Grippo held Morgan Financial out to the public as a company that could help homeowners who faced foreclosure on their homes through something Grippo called the “Equity Share Program.” As described by Grippo and his associates, the Equity Share Program involved creating a limited liability company (LLC) in the name of the homeowner’s house, in which the homeowner would supposedly own a 90 percent interest with the rest to be owned by one or two private investors.
In reality, the so-called investors invested nothing and were instead straw buyers recruited by Vito Grippo or his son, Frederick Grippo, because they had good credit. The Grippos and their associates then applied for mortgages in the names of the “investors” for the purchase of the properties owned by the homeowners in distress.
A homeowner in distress would come to a closing in Vito Grippo’s office in Holmdel and be given a stack of documents to sign to prevent foreclosure. The homeowners frequently did not understand that they would be transferring title to their homes to the “investor.”
The new mortgage loan applications filled out by the Grippos or their associates in the name of one of the investors contained materially false information about the loan applicant’s monthly income, his assets and whether the residence to be bought would be applicant’s primary residence.
Once the new loan application was filled out, it would be submitted to Worldwide Financial Resources for processing, where Freddie Grippo, a loan officer at Worldwide, would see to it that the loan was approved. Once the loan was approved and the loan money was wired to the settlement agent for a given transaction, Vito Grippo would direct the settlement agent to forward a portion of those loan proceeds to bank accounts that Vito Grippo controlled.
Properties that lost money through the Equity Share Program were found throughout the metropolitan area, including homes in Rutherford, N.J., Monroe, N.J. and Brooklyn, N.Y.
For the year 2006, Vito Grippo did not report $289,780 in gross income from the activities of Vanick Holdings LLC. For the year 2007, he did not report $213,261; and for the year 2008, he did not report $1,366,261.
In addition to the prison terms, Judge McNulty sentenced Vito Grippo to five years of supervised release and Frederick Grippo to three years of supervised release. Restitution will be determined at a hearing on July 17, 2013.
U.S. Attorney Fishman credited special agents from the FBI’s Red Bank Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; special agents from IRS—Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and postal inspectors in the Newark Division, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentences.
The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Economic Crimes Unit in Newark.
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Defense counsel:
Vito Grippo: Patrick N. McMahon Esq., Assistant Federal Public Defender, Newark
Frederick Grippo: Stacy A. Biancamano Esq., West Orange, N.J.Clifton, N.J.-based CPA and Client Arrested, Charged for Attempted Bribes of IRS Revenue AgentRead the Press Release
NEWARK, N.J. – A Certified Public Accountant with an office in Clifton, N.J., and one of his clients were arrested this morning by federal agents for allegedly trying to bribe an IRS revenue agent to reduce the client’s tax liability of more than $900,000, U.S. Attorney Paul J. Fishman announced.
Hamed Aref, 41, of Clifton, N.J., and his client Yousef Zaben, 62, of North Bergen, N.J., are each charged in a criminal complaint with one count of conspiracy to bribe a public official and two counts of bribery of a public official. Both men are variously charged for alleged bribes related to Zaben’s tax liability. One of the bribery charges against Aref also alleges he attempted to pay an IRS revenue agent to reduce the tax liability of another client, Zaben’s son.
The men were arrested this morning at their homes by special agents of the Department of the Treasury’s Office of Inspector General for Tax Administration (TIGTA) and are expected to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to documents filed in this case:
An IRS revenue agent working in the Mountainside, N.J., IRS office – referred to in the complaint as “R.A.” – was assigned to conduct an audit in February 2012 of Zaben’s son, a client of Aref’s. During a meeting with Aref that month, R.A. told him that approximately $90,000 in bank discrepancies for the 2010 tax year would require additional tax payments.
Aref ran his own accounting and tax preparation firm. In a conversation begun in Aref’s office and continued outside the building, per the CPA’s request, Aref asked R.A. to reduce the tax liability by $20,000, offering approximately $2,000 to the agent in exchange. R.A. pretended he would think about the offer and set a date for another meeting with Aref, then immediately reported the bribe attempt to law enforcement officers from TIGTA.
When Aref and R.A. met again in March 2012, R.A. was outfitted with video and audio recording equipment provided by law enforcement. At that meeting, Aref asked for documentation reflecting a reduction in his client’s income of more than $32,000 for tax years 2009 and 2010, and R.A. produced a false audit report reflecting the requested numbers. Aref then asked R.A. to leave the office and placed an envelope with $3,000 cash on R.A.’s chair. When R.A. returned, Aref told the agent the money was from Zaben, and stood guard while R.A. counted the cash out on the desk.
A subsequent IRS audit of Zaben revealed a number of large, unexplained bank deposits in 2009 and 2010, totaling more than $1.6 million, on which Zaben owed the IRS approximately $904,367. During meetings in February and March 2013, Aref and R.A. met at the Clifton office to discuss the liability. Aref provided false figures to R.A. that showed a total tax liability of approximately $1,137.94 for those years, and suggested a meeting between Zaben and R.A.
At that meeting, in April 2013, R.A. showed Zaben both the correct and falsified audit reports, and Zaben paid R.A. the falsely reduced amount of $1,137.94. Zaben then produced $10,000 in cash, which both defendants said was for R.A. Zaben also said he would pay R.A. an additional $5,000, some of which he gave to R.A. at a later meeting.
Each of the meetings in which bribes were paid was recorded by law enforcement.
The conspiracy count carries a maximum potential penalty of five years in prison, and the bribery counts each carry a maximum potential penalty of 15 years in prison. Each of the counts also carries a maximum $250,000 fine.
U.S. Attorney Fishman praised special agents of TIGTA, under the direction of Special Agent in Charge Robert Geary, for the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Aref, Hamed et al. Complaint
Test Prep Company Owner Who Was Extradited from Latvia Ordered to Pay $700,000 in Restitution for Stealing Questions from Medical Licensing ExamRead the Press Release
NEWARK, N.J. – One of the owners and operators of a Totowa, N.J., test preparation business, who was extradited from Latvia in October 2012, was ordered to pay $700,000 in restitution for her role in stealing “live” licensing examination questions from the National Board of Medical Examiners, U.S. Attorney Paul J. Fishman announced.
Egija Kuka, 40, who owned and operated Optima University with her former husband, co-defendant Eihab Suliman, 50, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to two counts of an indictment charging her with mail and wire fraud and conspiracy to commit mail and wire fraud. Judge Chesler imposed the sentence, which also included eight months’ time served, in Newark federal court. Suliman remains a fugitive.
According to documents filed in this case and statements made in court:
Optima University was a test preparation business that provided courses designed to prepare students for the U.S. Medical Licensing Examination (USMLE), which is created and administered by the National Board of Medical Examiners (NBME), an independent, not-for-profit organization headquartered in Philadelphia.
The USMLE is used by medical licensing authorities throughout the United States to evaluate physicians seeking an initial license to practice medicine. The test assesses whether international medical school graduates are ready to enter accredited residency or fellowship programs in the United States. Medical school graduates – whether they graduated from a United States medical school or a foreign medical school – generally must complete at least some parts of the USMLE as a prerequisite to enter into residency training or receive a medical license. NBME goes to extensive lengths to keep test questions secure and examinees are advised that the test questions used in the USMLE are copyrighted and not to be distributed or reproduced.
Beginning in December 2007, Kuka and Suliman solicited potential Optima University students by guaranteeing that the students would pass the USMLE, even if the student had previously failed it. Kuka and Suliman also assured potential students that any tuition paid to Optima University would be “risk-free,” and that any student who did not pass the USMLE could retake the Optima course at no additional cost.
On Dec. 2, 2007, Kuka applied via the internet to take the USMLE in Milan, Italy, falsely stating that she had graduated from the University of Oradea, an accredited medical school in Romania, with a doctorate in medicine. On Dec. 18, 2007, Kuka submitted a “Certification of Identification Form” along with a copy of a fabricated diploma from University of Oradea’s medical school to enable her to take the exam and gain access to, steal and reproduce the live test questions.
Kuka took Steps 1 and 2 of the USMLE on April 7, 2008, and April 14, 2008, in Milan. Video surveillance from those test sessions show Kuka using a small digital video recording device to record the live test questions that were displayed on the computer monitor. On May 28, 2008, Kuka sat again for Step 1 of the USMLE examination.
On May 28, 2008, a search was conducted at Optima University and live test questions were found. These live test questions were used by Suliman and Kuka on practice examinations provided to Optima University students.
The indictment was returned in July 2011. Kuka had already fled to Latvia. In September 2011, U.S. authorities requested Kuka’s extradition pursuant to the extradition treaty between the United States and Latvia.
In addition ordering her to pay restitution to the National Board of Medical Examiners and sentencing her to time served, Judge Chesler sentenced Kuka to two years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation that led to today’s sentence. He also thanked the Office of International Affairs, Criminal Division, at DOJ and Officials in the Republic of Latvia for their assistance in this matter.The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
13- 245Defense counsel: Peter Carter Esq., Assistant Public Defender’s Office, Newark
Leader of International, $200 Million Credit Card Fraud Scam Pleads GuiltyRead the Press Release
TRENTON, N.J. – A New York man has admitted his role in leading one of the largest credit card fraud schemes ever charged by the U.S. Department of Justice, U.S. Attorney Paul J. Fishman announced.
Tahir Lodhi, 53, of Hicksville, N.Y., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to commit bank fraud.
“Today’s admission of guilt by Tahir Lodhi brings to justice a leader of one of the biggest credit card fraud schemes ever charged by the United States,” U.S. Attorney Fishman said. “This type of fraud increases the costs of doing business for every American consumer, every day. Lodhi hurt not only the credit card issuers, but everyone who pays increased interest rates and fees because of the money sucked out of the system by criminals.”
“The criminal enterprise under Mr. Lodhi’s direction took advantage of the system and the good faith of banks and credit lenders they defrauded to the tune of hundreds of millions of dollars,” Aaron T. Ford, FBI Special Agent in Charge, Newark, said. “In doing so, they took advantage of the American public and legitimate users of the banking industry so that they and their families could live a lavish lifestyle. Today’s plea is the result of the hard work of the men and women of the FBI and our partners at the U.S. Secret Service, U.S. Postal Inspectors and the U.S. Social Security Administration, as well as a significant partnership with the private sector. In today’s world, where more and more individuals seek the fast buck by trying to defraud hard-working Americans, the Newark office of the FBI remains committed and focused on combating fraud at all levels of society.”
According to documents filed in this case and statements made in Court:Lodhi directed the activities of a number of other conspirators in fabricating more than 7,000 false identities to obtain tens of thousands of credit cards. They doctored credit reports to pump up the spending and borrowing power associated with the cards. Lodhi and others then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts, causing more than $200 million in confirmed losses to businesses and financial institutions.
The scheme involved a three-step process in which the defendants would:
· “Make up” a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus.
· “Pump up” the credit of the false identity by providing false information about that identity’s creditworthiness to the credit bureaus. Believing the furnished information to be accurate, the credit bureaus would incorporate this material into the false identity’s credit report, making it appear that the false identity had excellent credit.
· “Run up” large loans using the false identity. The higher the fraudulent credit score, the larger the loans that the defendants could obtain. These loans were never repaid, and Lodhi and his conspirators reaped the profits.The Sham Companies
The enormous size and scope of the criminal fraud enterprise required Lodhi and his conspirators to construct an elaborate network of false identities. Across the country, Lodhi and his conspirators maintained more than 1,800 “drop addresses,” including houses, apartments, and post office boxes, which they used as the mailing addresses of the false identities.
They created dozens of sham companies that did little or no legitimate business, obtained credit card terminals for the companies and then ran up charges on the fraudulent cards. To accept payments in the form of credit cards, a business must establish a merchant account with an entity known as a merchant processor. The merchant processor provides the business with equipment to process credit cards, receives payments from credit card companies for credit cards run at the business, and deposits those payments, minus a fee, into the business’ bank account. When the merchant processors shut down accounts operated by the conspirators for fraud, they would apply for new terminals and create new companies.
The sham companies also served as “furnishers,” providing the credit bureaus with false information about the credit history of numerous false identities of people who purportedly worked at or owned the companies.
Tradelines
Lodhi and his conspirators also used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud.
Tradelines come in two varieties: primary tradelines and authorized user tradelines. Primary tradelines are lines of credit in a credit history. If a credit card user has primary tradelines in good standing, it can have a significant impact on the user’s credit score, enabling the user to borrow more from credit card issuers. Lodhi and his conspirators, however, trafficked in fraudulent primary tradelines.
A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another, so-called “authorized user,” to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.
Certain of Lodhi’s conspirators created and sold fake lines of credit for false identities made up by Lodhi and others. These fraudulent primary tradelines were then used to increase the credit limits on fraudulent cards, so that the conspirators could reap even larger profits. Lodhi and other conspirators used the authorized user tradelines to create new identities.
Complicit Businesses
Lodhi and his conspirators also relied upon complicit businesses, including several jewelry stores in the Jersey City, N.J., area, to extract money from the fraudulent cards. The complicit businesses would allow certain conspirators to conduct sham transactions on the phony cards and would then receive the proceeds from the credit card companies and split them with the other conspirators. These complicit businesses maintained multiple credit card merchant processing accounts at the same time. By operating dozens of accounts, these businesses furthered the conspiracy by allowing more fraudulent transactions to be processed before the merchant processors shut down the account. The proceeds from these merchant terminals were deposited into various business checking accounts, and the money was paid out to the owners of the complicit businesses, along with other conspirators.
Lavish SpendingThe conspiracy generated enormous profits for Lodhi and his conspirators – even though they spent millions of dollars sustaining the elaborate network of drop addresses and running credit reports on the thousands of false identities. Records of the New York and New Jersey Departments of Labor reveal that many of Lodhi’s conspirators had no reported legitimate employment in the last five years. Nonetheless, Lodhi and his conspirators used the proceeds of the criminal enterprise to buy luxury automobiles, electronics, spa treatments, expensive clothing and millions of dollars in gold. They also stockpiled large sums of cash. Law enforcement discovered approximately $70,000 in cash in the oven of one of Lodhi’s conspirators.
Lodhi’s conspirators also moved millions of dollars through accounts under their control, and wired millions of dollars overseas. An analysis of 169 bank accounts of the defendants, sham companies, and complicit businesses has identified $60 million dollars in proceeds that flowed through the accounts, much of it withdrawn in cash. The conspirators wired millions of dollars to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan. Due to the massive scope of the conspiracy, which involved more than 25,000 fraudulent credit cards, loss calculations are ongoing. Final figures may grow beyond the present confirmed losses of more than $200 million.
The count to which Lodhi pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gain or loss caused by the offense. Sentencing is scheduled for Oct. 1, 2013.
The investigation previously resulted in the arrest of 22 defendants and the seizure of more than $4 million in gold from jewelry stores in Jersey City.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea. He also thanked postal inspectors under the direction of Postal Inspector in Charge Marie L. Kelokates, the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, and the U.S. Social Security Administration for their roles in the investigation.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the Economic Crimes Unit and Barbara Ward of the Asset Forfeiture Unit of the U.S. Attorney’s Office in Newark.
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Defense counsel: Howard Simmons Esq., New York
Lodhi Information
Internist Admits Taking Cash Kickbacks for Patient ReferralsRead the Press Release
NEWARK, N.J. – A Somerset County doctor practicing internal medicine at Newark Community Health Center, where she is the clinical director, today admitted receiving cash kickbacks for diagnostic testing referrals of her patients, U.S. Attorney Paul J. Fishman announced.
Padma Siripurapu, 46, of Belle Mead, N.J., pleaded guilty to an information charging her with one count of soliciting and receiving more than $50,000 in illegal cash kickbacks for patient referrals in violation of the federal health care anti-kickback statute.
According to documents filed in this case and statements made in court:
From 2009 through December 2011, Siripurapu agreed with representatives of the diagnostic center Orange Community MRI LLC (Orange MRI) that Orange MRI would pay her a set amount of cash for every MRI, CAT scan, ultrasound, echocardiogram, and DEXA scan she referred. Siripurapu referred patients for more than a thousand of these tests during that time period and was paid a per-test amount for those referrals.
Siripurapu admitted that on Nov. 2, 2011, she received $3,600 in cash from a government informant at her doctor’s office in Newark in exchange for referrals. On Nov. 17, 2011, again at her office in Newark, Siripurapu received another kickback for patient referrals, this time $3,450 in cash.
The anti-kickback charge carries a maximum potential penalty of five years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Oct. 9, 2013.Siripurapu is the twelfth person in the government’s investigation of Orange MRI and its corrupt referring doctors to plead guilty. Nine health care providers to have pleaded guilty to receiving kickbacks have agreed to forfeit $325,300 in illegal kickbacks from Orange MRI. The two other defendants, Ashokkumar Babaria, Orange MRI’s former medical director, and Chirag Patel, Orange MRI’s former executive director, have agreed to forfeit their corrupt gains. Babaria agreed to forfeit his revenues traceable to corrupt referrals, which the government has estimated could reach as much as $2 million. Patel has forfeited $89,180. The remaining defendants charged in the investigation are charged by complaints or indictments at this time.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, as well as criminal investigators with the U.S. Attorney’s Office’s criminal investigator program, for the investigation leading to today’s guilty plea.
The case is being prosecuted by Assistant U.S. Attorneys Joseph Mack and Scott B.
McBride of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit.13- 242
Defense counsel: Bruce A. Levy Esq. and Lawrence S. Lustberg Esq., Newark
Siripurapu Information
Eight Charged with Fraud, ID Theft, Money Laundering in Multimillion-Dollar International Cybercrime SchemeRead the Press Release
Organization Allegedly Capitalized on Information Hacked From More Than a Dozen Global Financial Institutions
NEWARK, N.J. – Eight alleged members of an international cybercrime, money laundering and identity theft conspiracy are federally charged in New Jersey with a scheme to use information hacked from customer accounts held at more than a dozen banks, brokerage firms, payroll processing companies and government agencies in an attempt to steal at least $15 million from U.S. customers, New Jersey U.S. Attorney Paul J. Fishman announced.
The eight defendants are charged together in a criminal complaint with conspiracy to commit wire fraud, conspiracy to commit money laundering and conspiracy to commit identity theft. Allegedly, Oleksiy Sharapka, 33, of Kiev, Ukraine, directed the conspiracy with the help of Leonid Yanovitsky, 38, also of Kiev. Oleg Pidtergerya, 49, of Brooklyn, N.Y.; Robert Dubuc, 40, of Malden, Mass.; and Andrey Yarmolitskiy, 41, of Atlanta, managed crews in their respective cities. Richard Gundersen, 46, of Brooklyn, and Lamar Taylor, 37, of Salem, Mass, worked for Pidtergerya and Dubuc, respectively. Ilya Ostapyuk, 31, of Brooklyn, allegedly facilitated the movement of fraud proceeds.
Pidtergerya, Ostapyuk and Dubuc were arrested this morning at their homes by federal agents, and Yarmolitskiy was arrested yesterday, June 11, 2013, as he arrived at John F. Kennedy International Airport on an overseas flight. He is expected to appear on a date to be determined before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court. Pidtergerya and Ostapyuk are to appear before Judge Waldor this afternoon. Dubuc is scheduled for an initial appearance in federal court in Boston. Taylor and Gundersen are being pursued by law enforcement, and Sharapka and Yanovitsky, Ukrainian nationals, remain at large.
“According to the complaint unsealed today, cybercriminals penetrated some of our most trusted financial institutions as part of a global scheme that stole money and identities from people in the United States,” said U.S. Attorney Fishman. “Today’s charges and arrests take out key members of the organization, including leaders of crews in three states that used those stolen identities to “cash out” hacked accounts in a series of internationally coordinated modern-day bank robberies. We will continue to pursue our investigation into this scheme and our fight against the rising threat of criminals for whom computers are the weapon of choice.”
“The investigation and successful prosecution of suspects involved in organized global fraud directed at electronic payment systems is dependent upon the collaborative efforts of federal law enforcement and private industry to ensure the confidentiality, integrity and availability of these systems as part of our critical financial infrastructure,” said Special Agent in Charge James Mottola of the U.S. Secret Service, Newark Field Office.
“These arrests underscore HSI’s commitment and the joint ongoing efforts across the entire law enforcement spectrum to stop these cybercriminals in their tracks,” said Andrew M. McLees, Special Agent in Charge of Immigration and Customs Enforcement, Homeland Security Investigations (HSI) in Newark. “HSI special agents will use every cutting-edge technological investigative tool at their disposal to dismantle these global criminal enterprises at the source and bring them to justice.”
According to the criminal complaint unsealed today:
Conspiring hackers gained unauthorized access to the computer networks of more than a dozen global financial institutions, including: Aon Hewitt; Automated Data Processing Inc.; Citibank N.A.; E-Trade; Electronic Payments Inc.; Fundtech Holdings LLC, iPayment Inc.; JP Morgan Chase Bank N.A.; Nordstrom Bank; PayPal; TD Ameritrade; U.S. Department of Defense, Defense Finance and Accounting Service; TIAA-CREF; USAA; and Veracity Payment Solutions Inc.
Once inside the victim companies’ computer networks, the defendants and conspirators diverted money from accounts of the companies’ customers to bank accounts and pre-paid debit cards controlled by the defendants. They then implemented a sophisticated “cash out” operation, employing crews of individuals known as “cashers” to withdraw the stolen funds, among other ways, by making ATM withdrawals and fraudulent purchases in New York, Massachusetts, Illinois, Georgia and elsewhere.
As part of the scheme, the defendants stole identities from individuals in the United States, which they used to facilitate the cash out operation, including by transferring money to cards in the names of those stolen identities. They also used some of those identities to file fraudulent tax returns with the IRS seeking refunds.
The defendants and their conspirators laundered the proceeds of the scheme, often through international wire transfer services, to the leaders of the conspiracy overseas.
The government’s ongoing investigation into the organization has so far identified attempts to defraud the victim companies and their customers of more than $15 million.
If convicted, each of the defendants face a maximum potential penalty of 20 years in prison on the conspiracy to commit wire fraud count, 20 years in prison on the conspiracy to commit money laundering count and 15 years in prison on the conspiracy to commit identity theft count. The wire fraud and identity theft counts also carry a maximum fine of $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offenses. The money laundering conspiracy count carries a maximum fine of $500,000, or twice the value of the monetary instruments involved.
U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Special Agent in Charge Mottola; HSI, under the direction of Special Agent in Charge McLees; Defense Criminal Investigative Service, under the direction of Special Agent in Charge Jeffery D. Thorpe; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen with the ongoing investigation. He also thanked the Department of Homeland Security’s Customs and Border Protection for assistance with the Yarmolitskiy arrest.
The government is represented by Assistant U.S. Attorneys Gurbir S. Grewal, of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit, and Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Sharapka, Oleksiy et al. Complaint
Sharapka, Oleksiy et al. Amended ComplaintCamden County, N.J., Man Sentenced to 46 Months in Prison for Conspiring to Sink Boat for Insurance PaymentRead the Press Release
CAMDEN, N.J. – A Camden County, N.J., man was sentenced today to 46 months in prison for organizing a plot to sink his fishing boat off the coast of Cape May, N.J., in August 2009 to collect $400,000 from an insurance company, U.S. Attorney Paul J. Fishman announced.
Scott Tran, 40, of Cherry Hill, N.J., previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an Indictment charging him with conspiracy to destroy a vessel on the high seas. Judge Bumb imposed the sentence today in Camden federal court.According to documents filed in this case and statements made in court:
Tran, Manh Nguyen, 60, of Philadelphia, and others engaged in a scheme to sink the Alexander II so that Tran could collect on an insurance policy with State National Insurance Co. In July 2009, Tran hired a captain for the ship, whom Tran and Nguyen then solicited to sink the Alexander II in return for payment. The captain then recruited a crew to help him sink the boat.
On Aug. 2, 2009, the Alexander II left Cape May. Although the Alexander II had little fuel, ice, food, and other supplies for a lengthy fishing trip, the ship’s log was falsified to read that more than 50 fish, weighing approximately 3,000 pounds, had been caught. Once the Alexander II reached a point 86 miles southeast of Cape May, the captain and his crew worked together in an unsuccessful attempt to sink it. After filling parts of the boat with seawater, they sent a distress signal to the U.S. Coast Guard and abandoned ship together in a life raft.Tran admitted that he communicated by email with the captain during the voyage, telling him that he should sink the boat. The U.S. Coast Guard rescued the captain and crew. The Coast Guard found no fish aboard the boat or in the hold. Tran admitted that he gave Nguyen several hundred dollars in cash to give to the captain and each member of the crew for their participation in the attempted sinking. Nguyen admitted to making those payments. Tran admitted that he offered to pay the captain $10,000 and each crew member $2,000 to sink the boat.
Tran then submitted a claim to his insurance broker in order to collect $400,000, the limit of the insurance policy. After the claim was denied, Tran filed a lawsuit in New Jersey Superior Court in Camden County, seeking damages of $400,000, including damage to the Alexander II and loss of use of the boat.
In addition to the prison term, Tran was sentenced to three years of supervised release, fined $75,000 and ordered to pay $280,000 in restitution. Nguyen was sentenced June 1, 2012, to two years in prison. Two crew members, Erik James, 41, of Cape May Courthouse, and Christopher Martin, 41, of Cape May County, both were previously sentenced 30 months in prison.
U.S. Attorney Fishman credited special agents of FBI, Atlantic City Resident Agency, Newark Division, under the direction of Special Agent in Charge Aaron T. Ford; and investigators with the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor, for the investigation leading to today’s sentence. He also thanked the Philadelphia and Cape May office of the U.S. Coast Guard, Investigative Division, for its assistance.
The government is represented by Assistant U.S. Attorney Howard Wiener of the U.S. Attorney’s Office Criminal Division in Camden.13-243
Defense counsel: Earl Kauffman Esq. of Philadelphia
Bergen County, N.J., Dentist, Owner of Three Dental Practices, Sentenced to 21 Months in Prison for Tax Evasion, Bankruptcy FraudRead the Press Release
CAMDEN, N.J. – A Bergen County, N.J., dentist and owner of three dental practices in Bergen and Monmouth counties, was sentenced today to 21 months in prison for evading more than $800,000 in taxes and failing to disclose almost $1.3 million in income in a bankruptcy petition, U.S. Attorney Paul J. Fishman announced.
Stephen A. Beukas, 47, of Mahwah, N.J., previously pleaded guilty before U.S. District Judge Renee Marie Bumb to an information charging him with one count each of tax evasion and bankruptcy fraud. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From early 2005 through 2008, Beukas was a practicing dentist and the sole owner of Stephen Beukas, DMD, PA (SBPA), New Jersey Mobile Dental Practice PA (MDPA) and Mobile Dental Practice PC (MDPC), which were dental practices located in Wyckoff, N.J, and Colts Neck, N.J. MDPA performed dental services for senior citizens and others who resided in nursing homes throughout New Jersey.
For the years 2005, 2006, 2007 and 2008, Beukas intentionally failed to provide the IRS with accurate information on the $2.6 million income he received as owner of the three practices. On Sept. 12, 2009, Beukas filed a tax return in which he falsely stated that his total income for the calendar year 2006 was $632,945, and that the tax owed was $187,905. Beukas failed to file timely tax returns in 2005, 2007, and 2008. His failure to disclose correct information to the IRS resulted in a tax loss to the U.S. of $800,309.
In 2008, when Beukas filed for Chapter 11 bankruptcy, he also failed to disclose almost $1.3 million in income he received as the sole owner of MDPC.
In addition to his prison term, Judge Bumb sentenced Beukas to two years of supervised release, fined him $50,000 and ordered him to pay $69,883 in restitution to the bankruptcy trustee for distribution to creditors.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Region 3 U.S. Trustee Roberta DeAngelis and the Newark office of the U.S. Trustee, for the investigation leading to today’s sentence.The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov
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Defense counsel: Rocco C. Cipparone Jr. Esq., Haddon Heights, N.J.
Bank Robber Sentenced to 10 Years in Prison for Two Newark Bank RobberiesRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man was sentenced today to 120 months in prison for robbing the Garden State Community Bank in Newark on two separate occasions, U.S. Attorney Paul J. Fishman announced.
Alfred Ferguson, 55, of Newark, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to two counts of bank robbery. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Alfred Ferguson committed two bank robberies on Sept. 17, 2012, and October 9, 2012, both of the Garden State Community Bank in Newark. Ferguson used a similar procedure for both robberies: After entering the bank wearing a red bandana over the lower part of his face, Ferguson would verbally threaten the bank teller, vault over the glass partition, and empty money from bank tellers’ drawers. While fleeing on his bicycle from the scene of the second robbery, Ferguson was apprehended by the police.
In addition to the prison term, Judge Chesler sentenced Ferguson to three years of supervised release and ordered him to pay $34,136 in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford with the investigation leading to today’s sentence. He also thanked the Newark Police Department for their contribution to the case.
The government is represented by Assistant U.S. Attorney David M. Eskew of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense counsel: John Yauch Esq., Federal Public Defender’s Office, Newark
President of New Jersey Clinical Laboratory, Six Salesmen Admit Bribing Doctors for More Than $100 Million in Test ReferralsRead the Press Release
NEWARK, N.J. – The president of Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS), three BLS employees and three associates admitted today to a conspiracy in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals worth more than $100 million to the company, U.S. Attorney Paul J. Fishman announced.
Each of the seven defendants – David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J.; Cliff Antell, 38, of Rumson, N.J.; Luke Chicco, 40, of Garden City, N.Y.; Doug Hurley, 33, of Hillsborough, N.J.; Kevin Kerekes, 47, of Florham Park, N.J.; and Craig Nordman, 34, of Whippany, N.J. – pleaded guilty to an information charging him with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The defendants entered their guilty pleas before U.S. District Judge Stanley R. Chesler in Newark federal court.
“Today seven men, including the president of a diagnostic lab, admitted to a conspiracy making more than $100 million in illegal income from business brought through bribes,” said U.S. Attorney Fishman. “Individual greed has no place in a treatment plan, and people seeking medical help deserve to know a doctor’s recommendations are based on professional expertise, not illicit profits. Today is an important step, but we aren’t finished holding criminals responsible for this conspiracy, or who break the law to put profits over patients.”
“Health care fraud is a serious crime which impacts all Americans either directly or indirectly, by inflating costs in the health care system,” said Newark FBI Special Agent in Charge Aaron T. Ford. “In this day and age when health care is a daily topic of discussion, the Newark office of the FBI remains dedicated and committed to combating fraud throughout the health care system. This investigation and these pleas entered today represent a tremendous effort by law enforcement to stem the tide of pay to play in health care in New Jersey.”
“Financial inducements, little more than bribes, must never interfere with proper medical care,” said Tom O’Donnell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including New Jersey. “We will tirelessly pursue criminals greedily manipulating public health care programs serving vulnerable Americans.”
According to documents filed in this case and statements made in court:
On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll; Scott Nicoll, a senior BLS employee and David Nicoll’s brother; and Nordman, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were then charged by federal complaint with the bribery conspiracy, along with the BLS company and New Jersey physician Frank Santangelo, 43, of Boonton, N.J. The charges against BLS and Santangelo remain pending.
Hurley, also a BLS employee, and associates Antell, Chicco and Kerekes, surrendered today to the FBI.
The conspiracy made millions in illegal profits between 2006 and April of 2013. During their guilty pleas, David and Scott Nicoll admitted that BLS made substantially more than $100 million from Medicare and private insurance companies – just from bills related to blood specimens sent to BLS by bribed doctors.
Statements during today’s pleas also detailed the means through which BLS paid doctors millions of dollars – in cash or under the guise of sham lease, service, and consulting agreements through an elaborate network of shell entities used for that purpose. The defendants also admitted that one component of the bribery scheme was to pay some doctors a fee per test to induce them to increase their ordering of certain tests.
In one text message conversation between Santangelo and David Nicoll detailed in filed documents, Santangelo stated that he and another doctor had “put our heads together and added a significant amount of testing. . .The testing is 90% legit.” The documents allege Santangelo planned to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
Those who pleaded guilty today each face a maximum potential penalty of five years in prison and a $250,000 fine on the bribery conspiracy charge and 20 years in prison and a $500,000 fine on the money laundering charge, or twice the gross gain or loss from the offense. In addition, David and Scott Nicoll have agreed to forfeit $50 million and $25 million to the United States, respectively. The other five defendants will forfeit amounts ranging between $800,000 and $1.3 million. Sentencing for all seven defendants is scheduled for Sept. 11, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Senior Litigation Counsel Andrew Leven and Deputy Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:
David Nicoll: John C. Whipple Esq., Chatham, N.J.
Scott Nicoll: Timothy M. Donohue Esq., West Orange, N.J.
Cliff Antell: Robert A. Weir Esq., Red Bank, N.J.
Luke Chicco: Robert J. Anello Esq., New York
Doug Hurley: Michael Baldassare Esq., Newark
Kevin Kerekes: Nace Naumoski Esq., Roseland and Alan Bowman Esq., Newark
Craig Nordman: Timothy R. Anderson Esq., Red BankNicoll, David Information
Nicoll, Scott Information
Antell, Cliff Information
Chicco, Luke Information
Hurley, Doug Information
Kerekes, Kevin Information
Nordman, Craig InformationPresident of New Jersey Clinical Laboratory, Six Salesmen Admit Bribing Doctors for More Than $100 Million in Test ReferralsRead the Press Release
NEWARK, N.J. – The president of Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS), three BLS employees and three associates admitted today to a conspiracy in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals worth more than $100 million to the company, U.S. Attorney Paul J. Fishman announced.
Each of the seven defendants – David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J.; Cliff Antell, 38, of Rumson, N.J.; Luke Chicco, 40, of Garden City, N.Y.; Doug Hurley, 33, of Hillsborough, N.J.; Kevin Kerekes, 47, of Florham Park, N.J.; and Craig Nordman, 34, of Whippany, N.J. – pleaded guilty to an information charging him with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The defendants entered their guilty pleas before U.S. District Judge Stanley R. Chesler in Newark federal court.
“Today seven men, including the president of a diagnostic lab, admitted to a conspiracy making more than $100 million in illegal income from business brought through bribes,” said U.S. Attorney Fishman. “Individual greed has no place in a treatment plan, and people seeking medical help deserve to know a doctor’s recommendations are based on professional expertise, not illicit profits. Today is an important step, but we aren’t finished holding criminals responsible for this conspiracy, or who break the law to put profits over patients.”
“Health care fraud is a serious crime which impacts all Americans either directly or indirectly, by inflating costs in the health care system,” said Newark FBI Special Agent in Charge Aaron T. Ford. “In this day and age when health care is a daily topic of discussion, the Newark office of the FBI remains dedicated and committed to combating fraud throughout the health care system. This investigation and these pleas entered today represent a tremendous effort by law enforcement to stem the tide of pay to play in health care in New Jersey.”
“Financial inducements, little more than bribes, must never interfere with proper medical care,” said Tom O’Donnell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including New Jersey. “We will tirelessly pursue criminals greedily manipulating public health care programs serving vulnerable Americans.”
According to documents filed in this case and statements made in court:
On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll; Scott Nicoll, a senior BLS employee and David Nicoll’s brother; and Nordman, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were then charged by federal complaint with the bribery conspiracy, along with the BLS company and New Jersey physician Frank Santangelo, 43, of Boonton, N.J. The charges against BLS and Santangelo remain pending.
Hurley, also a BLS employee, and associates Antell, Chicco and Kerekes, surrendered today to the FBI.
The conspiracy made millions in illegal profits between 2006 and April of 2013. During their guilty pleas, David and Scott Nicoll admitted that BLS made substantially more than $100 million from Medicare and private insurance companies – just from bills related to blood specimens sent to BLS by bribed doctors.
Statements during today’s pleas also detailed the means through which BLS paid doctors millions of dollars – in cash or under the guise of sham lease, service, and consulting agreements through an elaborate network of shell entities used for that purpose. The defendants also admitted that one component of the bribery scheme was to pay some doctors a fee per test to induce them to increase their ordering of certain tests.
In one text message conversation between Santangelo and David Nicoll detailed in filed documents, Santangelo stated that he and another doctor had “put our heads together and added a significant amount of testing. . .The testing is 90% legit.” The documents allege Santangelo planned to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
Those who pleaded guilty today each face a maximum potential penalty of five years in prison and a $250,000 fine on the bribery conspiracy charge and 20 years in prison and a $500,000 fine on the money laundering charge, or twice the gross gain or loss from the offense. In addition, David and Scott Nicoll have agreed to forfeit $50 million and $25 million to the United States, respectively. The other five defendants will forfeit amounts ranging between $800,000 and $1.3 million. Sentencing for all seven defendants is scheduled for Sept. 11, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Senior Litigation Counsel Andrew Leven and Deputy Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense counsel:
David Nicoll: John C. Whipple Esq., Chatham, N.J.
Scott Nicoll: Timothy M. Donohue Esq., West Orange, N.J.
Cliff Antell: Robert A. Weir Esq., Red Bank, N.J.
Luke Chicco: Robert J. Anello Esq., New York
Doug Hurley: Michael Baldassare Esq., Newark
Kevin Kerekes: Nace Naumoski Esq., Roseland and Alan Bowman Esq., Newark
Craig Nordman: Timothy R. Anderson Esq., Red BankNicoll, David Information
Nicoll, Scott Information
Antell, Cliff Information
Chicco, Luke Information
Hurley, Doug Information
Kerekes, Kevin Information
Nordman, Craig InformationBristol-Myers Squibb Executive Admits Insider Trading ChargesRead the Press Release
TRENTON, N.J. – A former executive with global pharmaceuticals giant Bristol-Myers Squibb Co. (BMS) admitted today to trading on inside information regarding a public company that BMS was in the process of acquiring, U.S. Attorney Paul J. Fishman announced.
Robert Ramnarine, 46, of East Brunswick, N.J., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with securities fraud.
According to documents filed in this case and statements made in court:Ramnarine was employed by Bristol-Myers Squibb Co. (BMS) from 1997 to August 2012. From March 2008 on, he held a variety of high-level, executive positions at the company, including director of Pensions and Savings Investments (March 2008-June 2011), executive director of Pensions and Savings Investments (June 2011-July 2012), and assistant treasurer for Capital Markets (July 2012-August 2012). As a result of these positions, Ramnarine was involved in evaluating potential acquisition targets for Bristol Meyers Squibb, including publicly traded companies, and was privy to inside company information concerning such transactions. He was legally banned from disclosing confidential information and material, nonpublic information he learned through his employment or from using such information for his personal benefit or the benefit of others.
During May and June 2012, Ramnarine, traded on material, nonpublic information regarding the company’s anticipated acquisition of Amylin Pharmaceuticals Inc., a publicly traded company. The material, nonpublic information available to Ramnarine enabled him to reap substantial profits by engaging in lucrative trading in stock options of Amylin shortly before BMS announced its plans to acquire Amylin in late June 2012. As part of his plea, Ramnarine admitted today that for purposes of sentencing his relevant criminal conduct includes $311,361 in illicit gains he made from trading in stock options of not only Amylin, but also several other BMS acquisition targets – ZymoGenentics Inc. and Pharmasset Inc., a company for which BMS submitted a bid through a confidential auction process, but which was subsequently acquired by Gilead Sciences.
Ramnarine faces a maximum potential penalty of 20 years in prison and a fine of $5 million. Sentencing is scheduled for Sept. 26, 2013.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit and Philadelphia Regional Office, under the direction of Daniel M. Hawke, for its assistance, and Bristol-Myers Squibb Co., for its cooperation during the investigation.
The government is represented by Assistant U.S. Attorneys Gurbir S. Grewal and Mala Ahuja Harker of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense Counsel: Douglas R. Jensen Esq., New York
Ramnarine Information
Former New Jersey Law Firm Employees Who Embezzled More Than $788,000 in Law Firm Funds Sentenced to PrisonRead the Press Release
TRENTON, N.J. – Two former employees of a law firm based in Edison, N.J., were sentenced to prison terms today for conspiring to defraud their former employer by improperly diverting more than $788,000 from the law firm, U.S. Attorney Paul J. Fishman announced.
Marla Deptula, 46, of Sayreville, N.J., previously pleaded guilty to an information charging her with one count of conspiracy to commit mail fraud and one count of subscribing to a false tax return. She was sentenced to 20 months in prison. Rose L. Crabbe, 32, of Plainfield, N.J., pleaded guilty to an information charging her with one count of conspiracy to commit mail fraud. She was sentenced to 15 months in prison. Both defendants previously entered their guilty pleas before U.S. District Judge Peter G. Sheridan, who imposed the sentences today in Trenton federal court.
According to documents filed in this case and statements made in court:
Deptula and Crabbe each admitted that between February 2005 and September 2007, they conspired to embezzle, and did, in fact, embezzle, from their former employer, referred to in court documents only as the “Law Firm,” by wrongfully writing checks from the law firm’s trust and business accounts to themselves and their personal creditors to pay for their personal expenses, including credit card bills, real estate taxes and child care expenses. Deptula and Crabbe then mailed some of the checks to their personal creditors. They further admitted to attempting to hide their theft by altering the payee information in the law firm’s accounting records.
Deptula, who had access to the law firm’s bank accounts in order to perform her duties as a secretary in the law firm’s real estate section, used that access to divert more than $788,000 from the attorney trust and business accounts for her and Crabbe’s personal benefit. Deptula received the vast majority of the stolen funds and failed to report any of the income on her federal tax returns.
In addition to the prison terms, Deptula and Crabbe were both sentenced to three years of supervised release. Deptula was ordered to pay $705,093 in restitution and Crabbe was ordered to pay $74,206 in restitution.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Marie L. Kelokates: IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Andrew C. Carey, for the investigation leading to today’s sentencings.
The government is represented by Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Office Criminal Division in Trenton.13- 238
Defense counsel:
Deptula: Andrea Bergman Esq., Assistant Federal Public Defender, Trenton
Crabbe: Michael Armstrong Esq., Willingboro, N.J.Three Members of Violent Newark Street Gang Indicted on Murder and Racketeering ChargesRead the Press Release
Alleged Gang Leader Charged with Six Gang-Related Killings
NEWARK, N.J. – Three alleged members of a violent Newark street gang were indicted by a federal grand jury today on charges that include murder, racketeering, kidnapping, robbery, weapons offenses and drug dealing, U.S. Attorney Paul J. Fishman announced.
Farad Roland, 28, Mark Williams, 30, and Malik Lowery, 31, all of Newark, were charged in a 27-count second superseding indictment connection with their alleged membership in The South Side Cartel, a subset of the 793 Bloods gang. Roland is charged with six counts of murder in aid of racketeering, while Williams and Lowery are each charged with one count of murder in aid of racketeering, charges which carry a mandatory minimum penalty of life in prison. The charge is a death-eligible offense subject to a decision by the U.S. Attorney General.
“As the indictment spells out, the gang members indicted today used murder and violence as tools of their criminal trade, punishing disloyal associates, intimidating rivals and silencing those they believed were cooperating with law enforcement,” U.S. Attorney Fishman said. “They presided over a reign of terror along Hawthorne Avenue for years. These charges finally assign responsibility for more than half a dozen unsolved homicides and represent the latest efforts in our ongoing pursuit of members of violent street gangs.”
“The primary objective of the FBI's investigation into the criminal enterprise known as South Side Cartel was to disrupt and dismantle one of Newark's most violent street gangs,” FBI Special Agent in Charge Aaron T. Ford said. “In conjunction with the Newark Police Department and Essex County Prosecutor's Office, the FBI and its law enforcement partners were successful in accomplishing this mission.”
Newark Police Director Samuel DeMaio stated, “I am pleased that our partnerships with our fellow law enforcement entities, particularly on the federal level, continue to prove effective tools against violent crime and habitual offenders here in Newark. Today's charges and the severity of the penalties are a testament to our combined resolve to remove these violent predators from our community. I thank all of those gathered today who played a role in today's announcement and look forward to strengthening our partnerships and multiplying our efforts.”
According to documents filed in this case and statements made in court:
The South Side Cartel has operated primarily on Hawthorne Avenue in Newark since 2002. Originally a neighborhood-based gang whose main activities were selling drugs and committing violent acts to aid the drug trafficking business, many of the gang’s members were officially brought into the Bloods gang in 2002 and 2003. As early as 2005, the gang was officially named The South Side Cartel. The gang allegedly committed numerous murders, shootings, robberies and other violent acts.
The gang based its criminal activities out of apartments located inside buildings dubbed “the Twin Towers,” located at 496-500 Hawthorne Ave. The Twin Towers were the scene of repeated narcotics and gun arrests by local law enforcement between 2002 and 2010. Many of The South Side Cartel members had tattoos depicting these buildings and the “SSC” logo, representing the gang’s initials.
At its peak, the South Side Cartel had about 20 members or associates, many of whom have since been killed in gang-related murders or who are serving prison sentences in state and federal prisons for gang-related crimes. Defendants Roland, Williams and Lowery represent the last of the leadership of the gang.
South Side Cartel leader Amin Roland, 35, (the brother of defendant Farad Roland) was convicted by a jury in July 2012 of being a felon in possession of a firearm. On Nov. 29, 2012, U.S. District Court Judge Salas sentenced Amin Roland to the statutory maximum prison sentence of 10 years.
“These three defendants posed a clear danger to the people of Essex County,” Acting Essex County Prosecutor Carolyn A. Murray said. “Their brazen use of violence as part of their drug and gang trade is stunning. We are pleased that we were able to work with our federal partners to bring them to justice and now look forward to the final resolution of their cases.”
“Today's indictment should serve as an example of our commitment to the hard-working, law-abiding citizens of this community,” Newark's Chief of Police Sheilah Coley said. “In forming these alliances with other local, county, state, and federal law enforcement agencies the Newark Police Department has transcended all departmental and jurisdictional boundaries in the interest of public safety. We are working together seamlessly to produce positive results in our violent crime reduction efforts and will continue our joint ventures aimed at improving the quality of life here in our City.”
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; the Newark Police Department, under the direction of Police Director DeMaio and Chief Coley; and Acting Essex County Prosecutor Murray, for the investigation leading to the today’s indictment.
The government is represented by Assistant U.S. Attorneys Robert L. Frazer and Andrew J. Bruck of the Organized Crime/Gangs Unit in Newark.13-233
Defense counsel:
Farad Roland: Donna Newman Esq., New York, N.Y.
Williams: James Patton Esq., Livingston, N.J.
Lowery: John Azzarello Esq., Chatham, N.J.
The counts in the indictment carry the following maximum potential penalties:Count
Offense
Defendant(s)
Maximum Penalties
Racketeering
All three defendants
Life in prison; $250,000 fine
2
Racketeering Conspiracy
All three defendants
Life in prison; $250,000 fine
3
Murder in Aid of Racketeering (Leaks Murder)
Roland
Life in prison or death penalty; $250,000 fine
4
Murder in Aid of Racketeering (Stewart Murder)
Roland
Life in prison or death penalty; $250,000 fine
5
Murder in Aid of Racketeering (“Fu” Murder)
Roland
Life in prison or death penalty; $250,000 fine
6
Murder in Aid of Racketeering (“Dubird” Murder)
All three defendants
Life in prison or death penalty; $250,000 fine
7
Murder in Aid of Racketeering (Silas Murder)
Roland
Life in prison or death penalty; $250,000 fine
8
Murder in Aid of Racketeering (Prince Murder)
Roland
Life in prison or death penalty; $250,000 fine
9
Use of Firearm in Furtherance of Violent Crime (Silas Murder)
Roland
Life in prison; $250,000 fine
10
Use of Firearm in Furtherance of Violent Crime (Prince Murder)
Roland
Life in prison; $250,000 fine
11
Carjacking (Mercedes Benz)
Roland, Williams
15 years in prison; $250,000 fine
12
Use of Firearm in Furtherance of Carjacking
Roland, Williams
Life in prison; $250,000 fine
13
Carjacking (BMW)
Williams, Lowery
15 years in prison; $250,000 fine
14
Use of Firearm in Furtherance of Carjacking
Williams, Lowery
Life in prison; $250,000 fine
15
Hobbs Act Robbery
Roland, Lowery
20 years in prison; $250,000 fine
16
Use of Firearm in Furtherance of Hobbs Act
Roland, Lowery
Life in prison; $250,000 fine
17
Assault with a Deadly Weapon in Aid of Racketeering
Roland
20 years in prison; $250,000 fine
18
Use of Firearm in Furtherance of Violent Crime
Roland
Life in prison; $250,000 fine
19
Assault with a Deadly Weapon in Aid of Racketeering
Williams
20 years in prison; $250,000 fine
20
Kidnapping in Aid of Racketeering
Williams
Life in prison; $250,000 fine
21
Use of Firearm in Furtherance of Violent Crime
Williams
Life in prison; $250,000 fine
22
Use of Firearm in Furtherance of Violent Crime
Williams
Life in prison; $250,000 fine
23
Assault with a Deadly Weapon in Aid of Racketeering
Williams
20 years in prison; $250,000 fine
24
Use of Firearm in Furtherance of Violent Crime
Williams
Life in prison; $250,000 fine
25
Assault with a Deadly Weapon in Aid of Racketeering
Roland
20 years in prison; $250,000 fine
26
Use of Firearm in Furtherance of Violent Crime
Roland
Life in prison; $250,000 fine
27
Conspiracy to Distribute Cocaine & Heroin
All three defendants
Life in prison; $10 million fine
South Side Cartel Superseding Indictment
Owner of Ocean County, N.J., Architectural Firm Sentenced to Three Months in Prison for Submitting False Corporate ReturnsRead the Press Release
NEWARK, N.J. – The owner of an Ocean County, N.J., architectural and engineering firm was sentenced today to three months in prison and three months of house arrest for filing fraudulent tax returns on behalf of his firm, U.S. Attorney Paul J. Fishman announced.
Pravin H. Patel, 67, of Toms River, N.J., previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an Information charging him with subscribing to false corporate tax returns on behalf of his firm, Pravin H. Patel Associates Inc., of Toms River, N.J. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Patel was the owner and operator of Pravin H. Patel Associates Inc. for more than 25 years; in recent years, the firm’s primary clients included the Toms River Board of Education and Ocean County College. Between 2005 and 2009, Patel filed corporate tax returns which falsely passed off personal expenses as legitimate business deductions.
Among the personal expenses which Patel admitted to improperly using to reduce the tax liability owed by his company was $112,650 in payments for renovations on his personal residence in 2006. Patel also admitted that the corporate tax return for the year ending in March 2007 improperly included more than $8,200 in expenses related to a personal country club membership and associated fees, as well as numerous personal expenses paid through a corporate credit card. Patel admitted that the corporate tax return for the year ending in March 2007 included false deductions of more than $145,000 and that the tax loss over a four-year period for which he is criminally liable totaled $63,815.
In addition to the prison term, Judge Chesler sentenced Patel to two years of supervised release, which includes three months of house arrest, and ordered him to pay a $15,000 fine.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and special agents of the FBI under Special Agent in Charge Aaron T. Ford, with the investigation that resulted in today’s sentence.The government is represented by Special Litigation Counsel Mark J. McCarren of the U.S. Attorney’s Office Special Prosecutions Division.
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Defense counsel: Lawrence Horn Esq. and Richard Sapinski Esq., NewarkNew Jersey-based Financial Advisor Pleads Guilty, Admits Defrauding Elderly InvestorsRead the Press Release
Judge Orders Forfeiture of Nearly $700,000 Scammed from Victims
TRENTON, N.J. – A Somerset County, N.J.-based financial advisor pleaded guilty today to stealing $138,000 from two elderly investors and funding his lavish lifestyle with money he claimed to be investing in conservative securities and his business, U.S. Attorney Paul J. Fishman announced.
Ralph A. Saviano, 72, of Bridgewater, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with wire fraud. Saviano surrendered himself to the FBI this morning before the plea hearing.
According to documents filed in this case and statements made in court:
Saviano, an investment advisor who had worked in the financial industry for more than 40 years, targeted clients through his association with Centaurus Financial, Inc., and later through Saviano Financial Group (SFG), from as early as July 2007 through October 2012.During this time, Saviano had approximately 300 clients, many of whom were unsophisticated investors between the ages of 60 and 85, whom he had known for many years and who trusted his financial experience and advice. Saviano admitted he targeted clients he knew were about to receive significant amounts of cash, such as maturing certificates of deposit (CDs), and proposed that they invest those funds in low-risk investments or in his business, SFG. Saviano said he would use these “business loans” solely for business expenses.
At the plea hearing, Judge Wolfson entered a consent judgment and order of forfeiture in the amount of $699,926.51, which constitutes the proceeds Saviano obtained from his known investor victims as a result of his offense.
Specifically, Saviano admitted that in May 2012, an 85-year-old client gave him approximately $63,000 from a mature CD that she was told would be invested in two investment funds. Saviano accompanied the client to her bank to redeem the CD and instructed her make the proceeds from the CD payable to him.
Also, in June 2012, another of Saviano’s clients – 80 years old and suffering from cancer – gave Saviano approximately $75,000 she inherited from a recently deceased relative, making the check out to cash with the words “financial investment” in the memo field.
Saviano admitted that, to date, has not returned to either woman any of the principals of their investments; nor have they received any interest payments on those funds. Instead of doing as he claimed, Saviano used the funds to repay prior “loans” from other clients in Ponzi-scheme fashion, and to pay for various personal expenses, including: at least $33,000 for granite countertops and other home improvements, $18,000 in cash payments to himself and family members, $10,000 in personal mortgage and rent payments, and thousands more in jewelry, clothing, a family vacation to Aruba and a theater donation.
The wire fraud count to which Saviano pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of up to $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offense. Sentencing is scheduled for Sept. 11, 2013.U.S. Attorney Fishman praised special agents of the FBI, under the direction of Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s New York office for its assistance with the investigation.
The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit and Evan Weitz of the office’s Asset Forfeiture and Money Laundering Unit in Newark.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel: Eric R. Breslin Esq., Newark, N.J
Saviano Information
Monmouth County, New Jersey Financial Adviser Sentenced to Seven Years in Prison for $9 Million Ponzi SchemeRead the Press Release
TRENTON, N.J. – Maxwell B. Smith, a Monmouth County, N.J.-based financial adviser and broker, was sentenced today to 84 months in prison for defrauding New Jersey investors out of more than $9 million, U.S. Attorney Paul J. Fishman announced.
Smith, 73, of, Red Bank, N.J., previously pleaded guilty to a five-count Information charging him with mail fraud in connection with his creation of a sham entity known as Health Care Financial Partners (HCFP). Smith entered his guilty plea before U.S. District Judge Mary L. Cooper, who imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
HCFP purported to be an investment fund with more than $300 million in assets under management, comprising loans to healthcare facilities such as nursing homes. Using his relationships with his investor clients, Smith sold supposed securities in HCFP through sham bond offerings ranging in price from $25,000 to $300,000 per investment.
Smith induced individual investors by creating an investment prospectus falsely stating that the total value of HCFP’s holdings exceeded $300 million. He also falsely claimed that investors’ money would earn yearly dividend interest of between 7.5 and 9 percent, and that the returns on their investments would be tax-free, similar to municipal bonds.
To lull investors into thinking their investments were legitimate and earning returns, Smith used a portion of investors’ funds to purchase bank checks, which he then sent to investors as purported earnings on their investments.
At his plea hearing, Smith admitted he did not invest the money as promised, but rather misappropriated the investors’ money for his personal expenses including dining, entertainment, gambling and international travel. Smith admitted defrauding HCFP investors out of more than $9 million.
In addition to the prison term, Judge Cooper sentenced Smith to three years of supervised release. Restitution will be determined at a future hearing.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; as well as special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation.
The government is represented by Assistant U.S. Attorney Gurbir S. Grewal of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
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Defense counsel: Robert A. Weir, Jr., Esq., Red Bank, N.J.
Livingston, N.J., Tax Return Preparer Admits Filing Tax Returns Using the Identification of A Dead PersonRead the Press Release
NEWARK, N.J. – A Livingston, N.J., tax return preparer today admitted filing false claims with the IRS using a dead tax return preparer’s identification and preparing false documents for numerous fraudulent loans, U.S. Attorney Paul J. Fishman announced.
Todd P. Halpern, 48, pleaded guilty today before U.S. District Judge William J. Martini to an Information charging him with filing false claims and wire fraud.
According to documents filed in this case and statements in court:
In late 2008, Halpern purchased A & V Financial (A & V), a tax return preparation business located in Guttenberg, N.J., from the wife of the prior owner, V.R., who had died in March 2008. Halpern received the company’s computers and all of its client records. As part of the agreement to purchase A & V, Halpern was to obtain a new Electronic Filing Identification Number (EFIN) in his own name. Instead, he continued to file tax returns using V.R.’s EFIN number because Halpern’s criminal record prevented him from obtaining an EFIN.
From 2009 through 2010, Halpern prepared and caused to be filed 657 fraudulent federal income tax returns with the IRS using V.R.’s EFIN. Halpern prepared and filed some of these fraudulent tax returns without the knowledge and authorization of the taxpayers identified on the returns. Some of these tax returns contained fraudulent income and deduction amounts, which generated fraudulent refunds that were directly deposited into Halpern’s bank account.
On or about June 24, 2009, in one case, Halpern prepared and filed a fraudulent 2008 Form 1040 U.S. Individual Income Tax Return with the IRS in the name of B.G., which fraudulently claimed an income tax refund in the amount of $13,183. The 2008 Form 1040 prepared by Halpern contained false income and deduction entries for B.G., because B.G. did not have any income for that tax year and did not file an income tax return. The $13,183 tax refund was directly deposited into Halpern’s bank account.
Halpern received a total of $373,938 in fraudulent tax refunds. He used these funds to support his lavish lifestyle, including purchases at Prada, Chanel, Saks Fifth Avenue, and Bloomingdales, to acquire season tickets to the New York Giants, to purchase thousands of dollars in jewelry, gold coins, and silver certificates, to make car payments on multiple luxury vehicles, including a 2007 Cadillac Escalade and a 2008 Lexus GX-470, and to buy car parts for his classic 1957 Chevy Bel Air.
From January 2008 through May 2012, Halpern prepared false documents for numerous fraudulent loans from financial institutions. Halpern prepared tax returns, Forms W-2, and bank statements showing inflated income and asset balances to be used to support loan applications for borrowers, including him, to acquire mortgage loans, primarily involving residential properties in New Jersey, as well as other personal and business loans. Halpern and others caused the fraudulent documents to be submitted to mortgage lenders, other financial institutions, the U.S. Department of Housing and Urban Development, and the Federal Housing Administration (FHA), which were relied upon for the approval of mortgage and other loans.
In November 2009, Halpern served as the buyer for the short sale of 215 Newark Ave., Bloomfield, N.J., from seller B.S. for a purchase price of approximately $185,000. In support of Halpern’s purchase of this property, an FHA-insured mortgage loan for Halpern in the amount of $181,649 was obtained from a N.J.-based mortgage company. Halpern and others submitted numerous fraudulent documents to FHA and to the mortgage company, including false bank statements, pay stubs and 2008 federal income tax returns in Halpern and his wife’s names. As in his tax fraud scheme, the false tax returns that Halpern prepared reflected V.R.’s identification number in an effort to conceal that Halpern had personally prepared the tax returns.
At the plea hearing, the Court also entered a Consent Judgment and Order of Forfeiture for $373,938 and for a classic 1957 Chevy Bel Air, which constitutes the proceeds that Halpern obtained as a result of his frauds.The wire fraud count to which Halpern pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of up to $1 million, or twice the gross amount of pecuniary gain or loss resulting from Halpern’s offense. The tax fraud count carries a maximum penalty of five years in prison, and a maximum fine of $250,000. Sentencing is scheduled for Sept. 10, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Cary Rubenstein, with the investigation leading to today’s guilty plea.The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the Economic Crimes Unit and Evan Weitz of the Asset Forfeiture and Money Laundering Unit of the U.S. Attorney’s Office in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel: Marshall J. Wofsy Esq., Jersey City, N.J.Halpern Information
Leader in $200 Million International Stolen Data Ring Charged in New Jersey as Part of Worldwide TakedownRead the Press Release
NEWARK, N.J. – One of the leaders of an international data theft ring has been federally charged in New Jersey for his alleged role in a scheme which caused approximately $200 million in fraudulent charges to credit cards issued in the United States and Europe, New Jersey U.S. Attorney Paul J. Fishman announced.
Duy Hai Truong, 23, of Ho Chi Minh City, Vietnam, is charged by criminal complaint with conspiracy to commit bank fraud. From 2007 until his recent arrest, Truong allegedly defrauded financial institutions as part of the massive scheme, in which personal identifying information relating to more than 1.1 million credit cards was stolen and resold to criminal customers worldwide.
Global law enforcement efforts by the FBI, the United Kingdom’s Serious Organised Crime Agency (SOCA) and Vietnamese authorities have disbanded the ring following a worldwide investigation into Truong and his conspirators. Truong is charged in the United States in conjunction with charges and arrests made over the past week in the United Kingdom, Vietnam, Italy, Germany and elsewhere.
Truong was apprehended by Vietnamese authorities on May 29, 2013, and remains in their custody on a related charge out of the United Kingdom.
According to the complaint filed today in Newark federal court:
The massive conspiracy, based in Vietnam, specialized in obtaining personal identifying information, known as “PII,” that had been provided to retailers who sold goods and services online and received online credit card payments. The conspirators illegally obtained a variety of PII, including purchasers’ names, addresses, credit card information and social security numbers – including from victims in New Jersey.
The conspirators, including Truong, then sold the data on a per-victim basis. The data related to a single, identifiable victim was referred to as a “dump.”
The conspirators used fraudulent e-mail accounts and a website located at www.mattfeuter.biz and www.mattfeuter.com to facilitate their crimes. Individuals seeking to illegally purchase victims’ credit card information either accessed the fraud website or sent the hackers an e-mail at one of the fraud accounts, requesting a certain number of dumps.
Truong and other sellers charged a fee for each dump. Fees varied from approximately $1 to $300 per dump, depending on the victim’s country of origin and the completeness of the information being sold, among other factors. The fees were paid via wire transfer services including Western Union and Liberty Reserve.
Those who bought PII from the conspirators would either incur fraudulent charges on the victims’ credit cards themselves, or resell the dumps to other downstream purchasers. Cumulatively the scheme resulted in $200 million in fraudulent charges.
If convicted, Truong faces a maximum of 30 years in prison and a fine of $1 million or twice the gain derived from the offense or twice the loss caused by the offense, whichever is greatest.
U.S. Attorney Fishman noted that the U.S. charge arose as part of the close, unprecedented coordination between the Newark FBI; the FBI’s International Operations and Cyber Divisions; SOCA; and Vietnam’s Ministry of Public Security, High Tech Crime Department.
The government is represented by Assistant U.S. Attorney Zach Intrater of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charge and allegations against Truong are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Truong Complaint
Former Engineer for Global Medical Technology Corporation Charged with Stealing Trade Secrets from New Jersey EmployerRead the Press Release
TNEWARK, N.J. – A former engineer for global medical technology company Becton, Dickinson and Company (BD) was arrested this morning by special agents of the FBI at a hotel in Ramsey, N.J., disrupting his alleged plan to relocate to India with trade secrets he stole from the Franklin Lakes, N.J.-based company, U.S. Attorney Paul J. Fishman announced.
Ketankumar Maniar, a/k/a “Ketan Maniar,” 36, an Indian national recently of Mahwah, N.J., is charged by complaint with theft of trade secrets for his own economic benefit. He is scheduled to appear this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court to face the charge.
According to the criminal complaint unsealed today:
Until his resignation from BD on May 24, 2013, Maniar was a staff engineer at BD’s Franklin Lakes headquarters, where he was a member of a group responsible for manufacturing prefillable syringes and pen injectors. In that capacity, Maniar had access to trade secret information related to BD products, including a self-administered disposable pen injector still under development by BD and not yet released for commercial sale.
While still employed by BD in May of 2013, Maniar downloaded approximately 8,000 files – containing, among other things, highly valuable BD trade secret information related to the pen in development – onto multiple computer storage devices, including external hard drives and thumb drives. Most of Maniar’s download activity occurred during the weeks leading up to his resignation.
Maniar also downloaded BD files from home after he had called in sick to work, and forwarded numerous files containing BD confidential information to one of his personal email accounts. The materials Maniar allegedly downloaded essentially comprise a tool kit for mass producing the pen injector.
On June 3, 2013, FBI agents executed court-issued search warrants of Maniar’s hotel room and seized computers and computer storage devices.
The maximum potential penalty for the theft of trade secrets charge is 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to the arrest. He also credited BD for its cooperation in the matter.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Offices Economic Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Defense counsel: Ryan Blanch Esq., New York (for initial appearance)
Maniar, Ketankumar Complaint
Essex County, N.J., Man Sentenced to Five Months in Prison for Transporting Explosive MaterialsRead the Press Release
TRENTON, N.J. – An Essex County, N.J., man was sentenced today to five months in prison for transporting explosive chemicals in a piece of polyvinyl chloride, or PVC, pipe to Pennsylvania without a federal license or permit, U. S. Attorney Paul J. Fishman announced.
Anthony Nicholas Gallo, 20, of North Caldwell, N.J., previously pleaded guilty before U.S. District Judge Anne E. Thompson to an Information charging him with transportation of explosive materials without a license or permit issued by the U.S. Attorney General. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
On Jan. 8, 2012, Gallo went to Pennsylvania and blew up potassium chlorate and magnesium in a PVC pipe, which provided a contained environment for the chemicals to produce a more powerful explosion. The potassium chlorate mixture is considered to be an explosive by the U. S. Bureau of Alcohol, Tobacco and Firearms.
In addition to the prison term, Judge Thompson sentenced Gallo to three years of supervised release.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the FBI Joint Terrorism Task Force, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentence. The FBI Joint Terrorism Task Force comprises law enforcement officers from 30 federal, state and local agencies throughout New Jersey. He also thanked the North Caldwell Police Department and the Essex County Prosecutor's Office for their significant contributions to this investigation.The government is represented by Assistant U.S. Attorney Joyce M. Malliet of the U.S. Attorney’s Office National Security Unit in Newark.
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Defense counsel: Anthony Iacullo Esq., Nutley, N.J.Owner of Window Installation Business Admits Tax EvasionRead the Press Release
TRENTON, N.J. – The owner of a window installation company located in Mt.Laurel, N.J., admitted today he converted to cash millions of dollars in the company’s gross receipts and used the money to pay his workers without withholding employment taxes, U.S. Attorney Paul J. Fishman, District of New Jersey, and Assistant Attorney General Kathryn Keneally of the U.S. Department of Justice, Tax Division, announced today.
Fred Marcus, 39, of Camden County, the owner and operator of Vortex Installations Inc., pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an Information charging him with one count of tax evasion.
According to documents filed in this case and statements made in court:
From early 2006 through the end of 2009, Marcus cashed approximately $2.8 million in Vortex Installations’ gross receipts at a check casher. Marcus used $1,025,868 of that money to pay cash wages to his workers, which he did not report to the IRS and from which he did not withhold employment taxes. From 2006 through 2008, Marcus failed to file IRS Forms 941 – Employer’s Quarterly Federal Tax Returns – in which he was required to report the wages paid to his employees. In 2009, Marcus filed false Forms 941, in that he failed to report the cash wages that he paid to Vortex employees.
On the count of tax evasion, Marcus faces a maximum potential penalty of five years in prison and a fine of $250,000, along with restitution to the IRS. Sentencing is scheduled for Sept. 19, 2013.
Assistant Attorney General Keneally and U.S. Attorney Fishman credited special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea.
The government is represented by Tax Division Trial Attorney Tino M. Lisella. Additional information about the Tax Division and its enforcement efforts may be found at: www.justice.gov/tax.
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Defense counsel: John Crayton Esq., Moorestown, N.J.Marcus, Fred Information